Good morning, everyone, and welcome to the Monro Muffler Brake fourth quarter fiscal year 2008 conference call. At this time we are in a listen-only mode and later we will conduct a question-and-answer session and instructions will follow at that time. If anyone should require operator assistance during the call, please press the * followed by the 0 on your touchtone phone. As a reminder ladies and gentlemen this 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. Karen Barbara of FD.

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 and Reform Act of 1995, I would like to call your attention to the risks and uncertainties related to these statements which are now more fully described in the press release and in the company’s filing with the SEC. Risks and uncertainties include but are not necessarily limited to uncertainties affecting retail generally, consumer confidence, and demand for auto repairs. Risks related to related endeavors including sensitivities plus interest rates, dependence on and competition within the primary markets which the company’s stores are located, and the need 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 and circumstances after the date thereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this call does not constitute any admission by Monro or any other person that the events or circumstances described in this statement are material. Joining us for this morning’s call from management are Bob Gross, Chairman and CEO; and Cathy D’Amico, CFO. With these formalities out of the way, I would like to turn the call over to Rob Gross.

Good morning and thank you for joining us on today’s call. We are pleased that you are with us to discuss our fourth quarter 2008 performance. I will also provide you with an update on our business as well as our outlook for the first quarter of fiscal year 2009. I will then turn the call over to Cathy D’Amico, our CFO, who will provide additional details on our financial results. Our performance for much of fiscal year 2008 was impacted by a challenging economy and weak consumer confidence. As a result our customers delayed big-ticket purchases and we experienced declines in store traffic of approximately 3.5% adjusted for days. However, our performance did improve at various points throughout the year during times when external pressures may have temporarily lessened or our customers could no longer postpone needed repairs and returned to us as their trusted provider. Also, because we own and operate all our stores, and are committed to being a low-cost operator, we are well positioned to produce solid results in both strong and weak economies and challenging times and are able to out-perform many of our competitors. Now I would like to review highlights from both the quarter and the year starting with the fourth quarter. I should begin my reminding you that the fourth quarter of fiscal year 2007 was our best ever fourth quarter in both sales and earnings with comps of 7.3% so we were up against a difficult comparison. Additionally, we had one less selling week in the fourth quarter of fiscal 2008 than in 07’, which impacts year-over-year comparisons of our sales results and leverage of fixed operating costs including distribution and occupancy costs that are included in cost-of-sales. Net income for the fourth quarter was $1.9 million; and earnings per share…

The first question comes from Tony Cristello, BB&T Capital Markets. Please go ahead. Anthony Cristello- BB&T Capital Markets: Rob, when you look at sales trends, and obviously they have been strong over the last two months, and you noted the 5% increase in April so it seems like sales are being helped by price, but I am interested in what you are seeing on the traffic side. You said that April and May traffic has been up and I am assuming that it is up for the first time in awhile. Are those new customers, or existing customers that are coming back to perform maintenance that they have deferred? Can you give more color on what you are seeing?

I think it is a combination of both. We were running mediocre numbers since July of last year. That is more than the normal deferral period of four to five months. What happens once you get beyond that, when people come back after that period they are customers that trust us because they are trying to defer the purchase? It ran the course of the normal oil change, they are back and they are buying potentially with bigger repairs. That being said, there are still long-term customers that are going to be walking into our stores today and deferring. But the normal deferral period is four to five months. Once you get beyond that, which we were in Q4, you then start to get new customers still deferring and old customers coming back. With April and May, to your point, we haven’t seen store traffic increases, certainly haven’t seen a +5, and +2.5 in May is very unusual also, so whether it is the digital advertising, the internet, some of the additional direct mail we are running, or some radio tests that we ran successfully in November, which we said we would put in our quiver of arrows to bring out in April or May, obviously have helped drive the traffic. The price increases people understand and you put that together and at least for a two month period whether it is an aberration or a trend we look pretty smart right now, and are pretty encouraged. If you would have asked me in March what I thought April through June would have brought I would probably have fallen somewhere around the +1 or +2 comp numbers. Hopefully it continues; in Q1 we are up against our toughest comp number, we are doing this against a +6 last year and once we again into the summer driving months in the second half of the year we are up against some really soft numbers. Hopefully it ends up well, but obviously I continue to be concerned with some record low consumer confidence numbers, $4 gas, foreclosures, and anything else that someone like me can be concerned about. Anthony Cristello- BB&T Capital Markets: You talked about what you thought costs would look like back in March. How did the quarter progress, January, February, March, from a same- store sales standpoint?

January was down 2.2%; February was up 1.5%; March, adjusted for days was up 3.7%. So for the quarter we were at .8% Anthony Cristello-BB&T Capital Markets: Catherine, do you have the days for the full year of how they will match up year-over-year? Catherine D’Amico: For 09’ versus 08’? It will be 306 days again and every quarter is exactly the same, so it makes life a little easier. Anthony Cristello- BB&T Capital Markets: I think in the September quarter of last year you had one less day as well. Is that correct? Catherine D’Amico: The December quarter actually. Anthony Cristello- BB&T Capital Markets: One last question. Rob, from a seasonality standpoint is there anything that is done differently in the months of April, May and June as people prepare for summer travel, that if they are going to travel less, which category would that impact the most for you?

We hear a lot of folks in our industry talking about the $4 gas tied into the miles driven. March was the worst miles driven month, I think it was down 4.3%. Last year miles driven in total was down 2% the first time since 1980. While I subscribe to people not liking $4 gas and cutting down on their driving, to put it in perspective I think it is in total a non-event for the summer. While consumer confidence prevents people from making purchases, the average driver is reducing their driving by 7%. It is less than that because there are more cars on the road but the average individual is driving 7% less on an average miles-driven per year of 13,000 miles. That is 800 miles a year. That is effectively one fourth or one fifth of an oil change. That is 800 miles off 50-60,000 before they get their shocks or struts replaced; brakes, 20-30,000 miles. So in the realm of actually negatively impacting our business and leading into the summer driving months you are probably not going to hear that as one of our excuses. We might try to pull everything else out, but that is not a reason for our business to fall out of bed. If anything, we probably think a more compelling thing that might be helping us is that new car sales being down, where you go from 17.5 million units per year to 15 million units a year, the key driver there is once someone decides not to buy a new car, they are not deferring one to two months the new car, they are saying that I am going to keep my old car for a year. It usually needs repairs, and they probably get the work done to have the old car carry them. We think that might be a trend. Albeit we are always seeing that March got a little better, April and May are great compared against tough numbers. I will retract all that when June turns into a +2.

Your next question comes from John Lawrence with Morgan Keegan. John Lawrence- Morgan Keegan & Company, Inc.: Quickly, Rob to follow up a little bit. If you could talk about the mix of product you are seeing out there now. Whether it is the tire chain, the tires, specifically about Black Gold and how that process works as far as the training aspects and being able to get incremental sales. Can you talk about that a little more, and how much is really involved to roll it out to another group of stores?

Certainly it is a mindset. It is training; it is pulling out exhaust; it is putting racking in; it is adding tire sales; it is getting the service stores to communicate with the tire stores and be cooperative in transferring the tires back and forth. You cannot underestimate the knowledge between being an order-taker for tires with one product line to being able to approach good/better/best with numerous product lines and do a better overall job with the customer.; more extensive than one paragraph that we might put in a press release or in a conference call script. That being said, you learn as you go which is why year one we had sixty stores, and year two we had fifty, and we will add another twenty-five to fifty but not before we continue to fine-tune what we are doing to make sure we are providing the best service for the customer and not hurting ourselves on margin. We are satisfied with what that brings to the table. In summary we said that our Black Gold stores for the year had 3.5% better comp than our non-Black Gold stores so we are encouraged that we are not trading off business, which is always your concern when you layer on additional things for a store manager and a store to execute, that they trade off tire sales for brake sales. Brake sales are performing beautifully and they guys in the field are doing a great job with our “brakes forever” campaign and certainly we feel we are picking up our share there as well as on the tire front delivering something to the customer that we didn’t before. It keeps them in our store for all their services and delivering at a high level; and most importantly creating incremental business for out stores, not trading off tires for brakes, or other categories. John Lawrence- Morgan, Keegan & Company, Inc.: Thanks for that update. And secondly, you talked about how much pressure the cost has been, the raw material costs on the business. Walk us through the last couple of year, which have been tough in that category. What are you seeing today? Is it changing as oil prices continue to go up, or has it moderated at all with the price increases?

I think a good rule of thumb in those years, our own manufacturers and our vendors should feel good; every price increase is always passed along quicker than if it goes the other way and they reduce their prices to us. Which is incorporated in all of our estimates another 8% on tires pretty much across the board in June. We have already seen oil, and as I said, we have incorporated both of those increases as well as something further, and I am not trying to help my vendors in charging me more down the road, but we are in a position where with the price increase to our customers we made in April that I think they understand with all these raw materials charges affecting every part of their lives, that the services they buy from us are typically every two or three years and they are not as apt to object to what we try and recoup from them but on a cost to goods side we will continue to see pressure under our estimation included in our numbers all year across the board on cost of goods, and we are committed to do a better job of recapturing it; maybe then we have the last couple of years as it started to spike up similar to health insurance.

Your next question comes from Scott Stember with Sidoti & Company. Please go ahead. Scott Stember- Sidoti & Company: Rob, can you give the operating contribution from ProCare again in 2008 versus 2007?

Operating income from ProCare was $1.4 million, or 3.6% of sales in 08’. It was $500,000 or 1.4% of sales in 07’. Scott Stember- Sidoti & Company: And in your guidance for 2009, what are you baking in there as far as operating contribution? Roughly speaking.

I wish I could get this number right at some point. We are certainly, with April running a 9.7 comp increase, and May 5.5 up, doing better than the core company, we are budgeting them to at some point run a consistent +10 comp and deliver the kind of returns that we would have expected to get last year. We are conservative in our budgeted numbers, but if I said we would hope to gain $.05 accretive, that would be great. I would still be disappointed with that number, that being said, if $.05 turns into $.02 accretive, that wouldn’t surprise me either. We are working hard on it, and there is additional benefits we get from those stores because without turning a lot of those ProCare stores into tire stores it wouldn’t have afforded us the opportunity to roll Black Gold out in places like Pittsburgh, and this year Cleveland and Columbus. It makes distribution more efficient, but at this juncture I continue to be disappointed with our performance. It is getting better, it is not where it should be. It is a broken record and we will fix it as quick as possible. Scott Stember- Sidoti & Company: And as far as your plan as to what to do with free cash flow, excluding any acquisitions that might take place, would you talk about your plans to repay debt?

Our plans are to repay debt. The way I would look at the next year, is we would fully expect in this marketplace over the next six months to either close or announce an acquisition. The definition of announcing an acquisition for us would be that we agreed to the price finally and just have due diligence to work through. Should you not hear anything by the end of Q2 along those lines, and stock performance continues to wane, and interest rates are where they are, we might address another stock buy-back with the understanding that over the last six months we probably would have generated free cash flow of over $20 million that we would have already paid down debt with. That being said, in the short term if we don’t do an acquisition you will see every dollar of cash flow for the next six months go to pay down debt. Scott Stember- Sidoti & Company: Last question: this might be a little more granular on the electronic advertising. Compared to the way that you used to do advertising, and maybe just talk about any cost saving associated with doing it the new way.

Our advertising last year was about 3.3% of sales. We are bringing it up to 3.7% of sales, adding programs which we will be running as long as they work. One of those is digital advertising, internet advertising. Getting involved in some markets; buying keywords; doing various things in other markets. Getting involved and increasing the span of our direct mail drops. Until they stop working I would rather not get into a ton of detail beyond giving you the financial impact of the cost of the advertising; certainly you can see some of the sales numbers, the traffic numbers support that some semblance of it is working. But as long as I have something that is at least working temporarily I would rather not share it, if you can understand that. Scott Stember- Sidoti & Company: What is the previous to this program? What is the most used form of advertising for Monro?

Direct mail, and it will always continue to be direct mail. We think the systems that we have established not only create a better mousetrap from the standpoint of lower costs to goods because we have less buy-outs, our labor productivity which is up 45%, but significantly lets us be effective in advertising, pitching up 100-150 basis points as a percentage of sales versus most of our competitors. As we have said before, 80% of our advertising outside of the yellow pages is one-on-one direct mail. Even with some of these programs that we are talking about you are still probably looking at while maybe no 80%, never down to 50-60%. It will run somewhere in there.

Your next question comes from Cid Wilson from Kevin Dann & Partners. Go ahead, Sir. Cid Wilson- Kevin Dann & Partners: My first question is a clean-up question. Your depreciation and amortization, was that about $5 million? Am I calculating that correctly? Catherine D’Amico: For the quarter, yes. Cid Wilson- Kevin Dann & Partners: Going a little deeper on brakes. Can you give us a sense of what you are seeing, what is going differently between you and Midas? Midas reported that their brake sales are down 9%; that is quite a contrast between your brake sales and theirs.

It is difficult to say. They would probably say that the Northeast is doing better, and their northeast brake sales are better than the overall chain. I think that our $99 brakes forever campaign, our field people with the focus, are better than anyone out there, and when we put our mind to something, whether last year with alignments, and we ran up 30% comp.; whether it is the Black Gold program where there is always opportunity to improve but we rolled that out better. Whether it is the ‘brakes forever” campaign and executing it at store level, plus the years of building up trust and perceived value with our customers pays off in the business model of company-owned and operated stores. I think it is a lot of things, and our guys deserve a lot of credit for getting it right. Until next quarter when they run flat and I tell you how stupid they are! Cid Wilson- Kevin Dann & Partners: My last question is: are you seeing any change in the average age of the vehicles that are being serviced? Are they getting newer, or any changes there?

The overall data says that the average vehicles are getting older, 9.6 years versus 9.4 for light vehicles. But if the question relates to new car sales slowing up and is that driving it, maybe some of that was baked in last year but we wouldn’t have that close real time data to see it move. We can look at an annual basis and see it skew towards people holding their cars longer, a piece of that is certainly the economy; a piece of that is a positive macro trend of demographics and baby boomers’ children driving now and more cars per household works to the benefit of what we all do for a living.

Our next question comes from Tom Spiro, Spiro Capital Management, Inc.

Question one is if new car sales weaken, have you seen or do you expect to see dealers become more aggressive at getting servicing business?

I don’t know how much more aggressive they can become than they have over the years. I think they used to drive 70% of their income from new car sales, and 30% from repairs. The numbers I see now are 50/50 and certainly if you listen to the radio or watch TV you go through various fits and starts of the commercials they are running; half of them are for repairs. The inherent difficulty they have in competing with us is for a starting point you would have to drive by two of my locations to get to them, so it is convenient, and finally you are typically paying from 33-50% more to go to them. So they are more expensive and will always be because they pay more for parts; their fixed cost overhead is more expensive; their labor is more expensive yet no more qualified to do the type of high-velocity, low technical repairs that we do. Certainly for transmissions and front-engine work which we don’t do them, have the technical expertise where we don’t, but we don’t need to pay for knowledge; we pay for execution. So our labor productivity will always be better; our fixed cost structure will always be better; our advertising costs will always be better, and we will always be more convenient. That being said, if you track ten years going back, and ten years going forward, what it shows is that small, independent guys are going out of business and that share is being grabbed by the dealers doing a much more effective job as well as the repair specialists and tire stores doing a much more effective job. We are not so much battling each other anymore, we are battling for the share of the guys going out of business.

Secondly, on acquisitions: Do you typically find that you are one of several buyers for a prospective deal? Are you the only guy, or how does that work?

Over the last three years we have been the only guy on any deal we have done, or any deal we are waiting to do and the hold-up is not a motivated seller or someone who is fearful of giving us information. We have the information to make the decisions, the hold-up is similar to what you see in the real estate market now. We might have three to five properties on our desks that we are willing to pay a certain price for, and that is a fair price in today’s market but no one wants to take the hair cut that is representative of a tough economy. Their earnings are going down, their sales being challenged, their cost of goods going up, so we haven’t agreed to a price yet, but in every case where we are currently involved and anything we have accomplished over the last two to three years it has all been us versus what we view as the sellers unrealistic expectations which haven’t been bridged yet.

Have these tended to be company’s in trouble, small shops in trouble, or are they healthy, thriving operations?

Some are in trouble, some are still profitable, but less profitable than they would be and a lot of times in some of the 20-30 store chains what you have is a business that has been in the family for fifty or sixty years. The father started it, the guy currently running it no children to take it over, but they have started with owning their real estate. So they started sixty years ago with one property, owned the real estate, of the twenty or thirty stores they might own half of the locations, and where the disjoint sometimes is, forgetting about the emotional aspects of selling your home or business that has been in the family is they are stuck with the real estate costs under-burdening their business with the rent they charge versus what they could achieve if they just held the real estate and just leased the property. So there is some confusion in what the cash flow is and what the business is really producing. We run into trouble because their professionals either are not explaining it well enough or are not motivated to explain it well enough that they are missing the boat that they can keep the real estate, and make a million dollars straight profit on the real estate but combined they are only making $500,000 and they don’t realize that what they have is a business that is losing money and is deteriorating to the extent that until they go into negative cash flow they don’t get it quite as well.

Lastly, on the subject of co-op advertising. Can you tell me how large of a dollar amount that was with the fiscal year now over? Like a ballpark number?

No.

Is it available on all product lines, brakes, tires, etc.? Does it vary with your volumes?

It absolutely is volume generated. The recognition of co-op is tied to inventory turns and certainly it is netted to tie-out to the advertising percentage which we certainly be willing to give; we can’t break down but a lot of times in a given category there is one vendor and it would become apparent what these numbers are and we think we treat our vendors very well and are one of the few guys that are growing the business and certainly wouldn’t want us to share our cost structure with our competitors and I am sure they don’t want us comparing with all of their other customers what they might be doing for us.

For a given level of volume, does the percentage or the dollar amount change, for example when you budget for fiscal 09’, if you assume your volume in brakes for example, can you get comfort that co-op advertising rebate associated with that is going to be why?

Absolutely.

Your next question comes from Jack Balos from Midwood Research.

I wanted to get a little more clarification on the change in the advertising. Because of the [inaudible] and its net ads at the same time I think you said you increased direct mail drop. I am not clear as to whether the percentage that you spent of 80% for direct mail, has that gone down?

Yes, not significantly, you are not going to see us at 60%. Maybe we are at 75% now. We increased direct mail in various markets where direct mail works very well. We have added some radio in markets where we have a lot of density and radio is cheap and in a lot of markets we added some internet advertising and buying keywords and things in markets that have high internet usage to see how that might serve us. We are never going to get away from direct mail. We think it is a huge competitive advantage based on our database and our systems. That being said, we think there are also pockets of things we can do smart. The degree to which advertising increased was from about 3.3% to 3.7% in total.

Is the area that ProCare is in, are they benefitting from the advertising that is new for that area?

Well, I think new for that area, but remember what we said last year. Part of the problem is, we needed to replace a bunch of people, we needed to do a complete name change which we didn’t really intend to do, and until you get your operations running well you don’t invest in advertising to drive customers. We held back on advertising in a lot of areas that it would behoove us to advertise a new name and a new entrance into a marketplace but you don’t want to spend money driving new customers to an operation that you don’t think is delivering the kind of service to the customer that you want. We said that we tried some things in November, we think our operations are under control there and running better and now I think are fairly comfortable with a 9.7 in April, a 5.5 in May, in a tough marketplace that some of the advertising that they have seen for two months back to back for the first time in two years is hopefully benefitting, but as you know Jack, two months is not a trend. It is a good feeling right now.

The important thing I think from what you are saying is that operationally speaking in terms of management and operations and systems that you are where you want to be with ProCare?

So you have the operations performing like they should be, so therefore you can advertise and be comfortable that the customer coming in will get a good experience?

Correct.

The last question comes from Mark Cooper with Wells Capital. Please go ahead.

Did you say that your cash flow from operations for the year was $37 million? Catherine D’Amico: Yes.

Does that mean that for March it was $0.? I calculated that for the first nine months. Catherine D’Amico: Q4 is our softest quarter. I don’t have the 10Q in front of me. You have the other 10Q for December. It is just the line cash flow from operations. It could have been flat with March, yes. March was a tough quarter and we had one less week and the pluses and minuses could have netted to $0.00. I don’t think that is necessarily true. We paid down a lot of debt for six months, and then the next six months it started pretty flat in terms of cash available. The first two quarters are out strongest quarters.

I understand that, I am just looking at that line that you just cited cash flow from operations, I don’t think I have ever seen a company report less than $5 million in any given quarter, so it just surprised me a little bit. At least that is what the 10Qs say. Catherine D’Amico: It is the year-to-date. I can get back with you if you want after the call and once I have the other Q in front of me.

Sure, that would be fine. And the CapEx number is approximately $8 million, is that right? Catherine D’Amico: Yes.

At this time I would like to turn the call back over to management for closing remarks. Please go ahead.

Thanks everyone for your continued support of the company. We are working hard to work our way through a difficult period and are encouraged about where we are and how we are performing and will continue to strive to make April and May repeat themselves throughout the year. We look forward to talking to you again with an update in July. Thank you.