Good morning, ladies and gentlemen, and welcome to Monro Muffler Brakes Earnings Conference Call for the Second Quarter of Fiscal 2015. 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. Effie Veres 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 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 relating 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 to 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’d like to turn the call over to John van Hell. John, you may begin.

Thanks, Effie. Good morning and thank you for joining us on today’s call. We are pleased that you are with us to discuss our second quarter fiscal 2015 performance. I’ll start today with a review of our results for the quarter and an update on our key initiatives and then we’ll provide 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. Similar to our strong performance in the first quarter, our unique business model enabled us to deliver record sales and net income for the second quarter with sales growth of 8% and net income growth of 20% versus the prior year. While we are disappointed in our comparable store sales results, which we believe reflect a continued difficult macro environment, outperformance of our acquisition, improvement in margins and cost control helped us to achieve earnings results within our expected range. Our strong business model and execution allowed us to continue to deliver on our key objectives, including driving lower material costs, effectively managing operating expenses, generating strong sales and earnings contributions from our recent acquisitions and capitalizing on opportunities to complete additional acquisitions at attractive prices. Our focus in strong execution enables us to lead our industry in both strong and weak markets. Second quarter comparable store sales were down 2% driven by a weak consumer sales environment. We continue to see an extended growth cycle, particularly as it relates to higher ticket purchases with consumers allocating spending to their most pressing needs. Coming off a very strong first quarter in our service business, we saw a second quarter increase in comparable store sales of approximately 5% for alignments and 4% for brakes, which are key profitable…

Remember that every $1 increase in gross profit per tire is $0.05 of EPS, and every 1% increase in units equates to about $0.025 in EPS. Second, limited impact of cost increases from the tariff on our import tires in the range of 5% to 10%, expanding our cost advantages over competitors and providing opportunity for increased gross profit per tire. Recognition of vendor rebates in fiscal 2016 that are not being recognized in the fourth quarter of this year, due to our investments in inventory. If recent trends hold, a decline in oil cost of about $1 million in fiscal 2016, sales and earnings contribution from our fiscal 2014 and 2015 acquisitions, and additional acquisition, particularly if the consumer and operating environment remains difficult. With that, I would like to open the call to Q&A. Operator?

Thank you, sir. (Operator Instructions) We’ll go first to Bret Jordan at BB&T Capital Markets. Bret Jordan – BB&T Capital Markets: Hey, good morning, guys.

Good morning. Bret Jordan – BB&T Capital Markets: Hey, now that you got a pretty big regional footprint, I can start asking the question about regional performance. Could you give us any color as far as areas of particular strength or weakness, from the mid-western markets to northeast and that added to the south?

Yes, there is nothing that I would call out as that significant of a difference between the different areas. I mean, we’re – where we’re relatively new down in the very south so now maybe in future we’ll have more to comment there. Bret Jordan – BB&T Capital Markets: Okay. And what’s been the decision as far as distribution to the Florida stores? Are you doing more out-buyers or are you going to try to run weekly truck delivery down to that market?

Right now, we’re – and this is for parts, we’re being supplied locally down there for on the parts side, that will continue till we probably double or more the size, the number of stores down there. And on tires, of course, we get the majority of our tires delivered direct to the stores. So we’ve enabled those relationships down there. Bret Jordan – BB&T Capital Markets: Okay. And then as it relates to the BJ’s announcement, are they going to try to keep a service offering there or will they just cut back to mounting and balancing their own tires and give up services that you’re providing?

Yes, what I understand is they’re going to just run their tire base for tires. Bret Jordan – BB&T Capital Markets: Okay. And then one last question on Chinese inventory, to talk about building some inventory levels prior to perspective tariff, what levels would you consider taking them up to, I guess, how big an investment in low cost inventory can you make or would you think about making?

Well, I don’t mind to talk about the details of what we’re doing. For competitive purposes, that’s why I thought it was more helpful to everyone that we will talk about what the overall impact will be looking forward. Certainly, we got coverage for several months right now and that is a piece of it, as is working with our existing new vendors. Bret Jordan – BB&T Capital Markets: Okay. Great, thank you.

Thank you.

We’ll go next to James Albertine at Stiefel. James Albertine – Stiefel: Great. Good morning and thanks for taking the question. I wanted to ask a very quickly if I could, just a month comp trends during the quarter. My apologies if you’ve said that on the prepared remarks, I was not in the queue for that.

No, we didn’t, July was down three, August was down two, September was down one. James Albertine – Stiefel: And you said you’re running on 1.5% October today?

Yes, that’s correct. James Albertine – Stiefel: Okay. Great. Thank you. And, so given your cadence of M&A and so it gives you an opportunity to see more directly via the diligence of those deals, how your competitors are performing and/or reacting to the current environment. So I want to get a sense for what you’re seeing from a competitive standpoint, extend that to what you’re seeing on the promotional environment and so on and so forth? And then I have one quick follow-up question after that.

Sure, the smaller operators and the guys that we’re looking at are having some trouble in this market. It’s shocking, they seem very much of the sales side that we are. Although, they are not making the money that we are. Overall, acquisitions are getting cheaper as a result of that. James Albertine – Stiefel: Perfect. That’s what I was hoping to get some color on and then lastly just if you could remind us understanding there are various key differences in terms of where Monro is today versus where it was on October 2009, where the market is today versus back then. But as that 35% initial tariff came on, which as I understand it was above and beyond the 4% that always sort of seize to exist if I understand correct.

Correct. Yeah. James Albertine – Stiefel: So when that happened how quickly does the market react in your experience to take pricing higher? And so also, I’m just trying to get a sense of the cadence looking ahead into third quarter and fourth quarter, should this tariff which sounds like you’re pretty confident, the tariff be implemented.

Yes, I guess, you could stay confident, but I also think it’s prudent for us to act like it will, given the landscape. Tire prices when went fairly early, fairly quickly after the tariff came on last time and that is a lot of operators look at, when I have to replace this inventory at a higher cost, I now need to start charging more.

Yes, Jamie, this is Rob. I think it’s reflected in our numbers, and really the biggest upside I think what John is trying to allude to is competitively the control we have and having a lower cost base and continued lower cost base, if not expanding lower cost base in our competition but really that, it bodes well for next fiscal year, while what you’re asking is incorporated in the guidance this year. James Albertine – Stiefel: Right. Understood. Thanks again, gentlemen and Cathy, for all your help. And we’ll talk soon. Good luck in the next quarter.

Thank you. Catherine D’Amico: Thank you, Jamie.

Thank you.

Moving on, we'll go next to Rick Nelson at Stephens. Richard Nelson – Stephens Inc Investment Bank: Thanks and good morning.

Good morning. Richard Nelson – Stephens Inc Investment Bank: If you can provide some color around the acquisition multiple. As I understand, the earnings are becoming more depressed kind of with some of these candidates, but the multiples you're paying, have they been consistent what’s you done in the past?

Yes, the multiple is consistent. We talked about 7 to 7.5 times EBITDA. The prices are going down because of some of the – because of the pressure on earnings. What I will say in terms of the overall value out of the acquisitions is more recently you'll see at our metrics, we’re getting more real estates in these deals. So longer-term, as you know, owning is – we want to have the right mix of owning versus leasing, but we’re doing better on that front, which I, lowers the long-term cost of the business.

Yes, I think the other thing Rick, that might show up is, it would be more in where we consistently talked about the 800 basis points to 1,500 basis points on every deal. The fact that the cost advantage of expanding might push that, more towards the higher end as opposed to the 800 number. Richard Nelson – Stephens Inc Investment Bank: Thanks for that color. Also curious why the tire price increases that you've taken why that isn’t working into the tire comps and, if you can also comment on market share what do you think tire market share is for you guys?

Sure. The tire price increases is working, into the comp in respect of the delta between the units and the overall comp, that’s come down and we’ll turn positive. Going forward, units were weak in the second quarter, but I don’t believe that that was a significant result of our taking the pricing up. So unit trends have improved from Q2 into the early part of October. I think it's much more of a consumer issue. We've been talking about the consumer for well over a year now. And I do expect that there are some opportunity with winter that the consumer will react better and even better than – even better and earlier than they did last year. So we haven’t looked that into our guidance. Richard Nelson – Stephens Inc Investment Bank: So conservative from that standpoint. Thanks a lot, and good luck.

Sure. Thank you.

(Operator Instructions) And moving next to Anthony Deem at KeyBanc. Please go ahead, sir. Anthony Deem – KeyBanc Capital Markets, Inc.: Hi, good morning.

Good morning. Anthony Deem – KeyBanc Capital Markets, Inc.: Good morning. Few questions here. First, on the second-half EPS outlook, it looks like the guidance effectively was reduced $0.10 to $0.13. I just want to make sure I have the dimensioning right, sounds like $0.02 to $0.03 from the warehousing, $0.02 from the exit at BJ’s business. And so I’m wondering of the remaining $0.06 to $0.08, how much of the same store growth and how much might that vendor rebate being pushed out in a fiscal 2016 be, and then also if I hear if there's additional Obamacare costs?

Those – we have been in our guidance. We just continue to point it out as an issue for the fourth quarter. The vendor rebates is $0.02 in the last half, particularly in Q4 as I said better reverse next year. So that's an addition of $0.02, the rest of it is basically the impact on sales. We effectively, in sort of projecting forward the run rate sales that we have, reduced the sales guidance by 2% over the last six months. When you look at that, every 1% we talk about is $0.07, that’s effectively $0.07, 2% in the last-half of the year. So the sales, and you can call it the net of sales another margin is the plug there. Anthony Deem – KeyBanc Capital Markets, Inc.: Okay. And then, so…

Which is less than $0.07. So, we are continuing to get some margin help. Anthony Deem – KeyBanc Capital Markets, Inc.: Okay. And then just wondering of the outlook on the second-half same-store performance, can you give me a reason, is it – it sounds like the outlook was lowered somewhat. Is that isolated to maybe service or the outlook for tires, is it simply, because October is starting a little bit weak here, and just wondering if you can provide a little additional color?

Sure. The outlook is where it's at because of the run rate that we've had. And we – again, we’ve been talking about the consumer over the last year, and I think, it's just a consumer that is allocating their dollars. I would expect that the service business will continue in the brakes and alignment category to run positively. And I think that’s a number that we felt was, at least, a continuation of what we've seen, and we pointed out what we think are the upsides there. We are in an extended deferral cycle. I still believe the next move is the – for the consumer to shorten that, which will help our times. We haven’t seen it yet, and we may see that in November with tire sales, particularly if we get some early weather. So... Anthony Deem – KeyBanc Capital Markets, Inc.: Great. And then, on the inventory pre-buy ahead of the tariff, just wondering if you could share any preliminary thoughts on what is the earnings opportunity and the timing of any benefit from buying low and selling high. It sounds like it’s going to be 2016 event, despite the – it sounds like a tariff implementation might come in your fiscal 2015. So, now I'm just kind of wondering if you can ballpark how much you expect to benefit in fiscal 2016 versus the $0.02 to $0.03 cost headwind you are incurring this year.

Yes. I – we’re taking some costs in the second half of this year to put ourselves in a strong position with respect to the tariff. So let’s say in November there’s an announcement in November and in January. There may be some impact – some positive impact on the fourth quarter. We pointed out that we really haven't pulled that into any estimates. What we talked about is a favorable pricing environment in the fourth quarter is based off of where we were at and towards the end of Q2 after we implemented some of those pricing increases. So, the primary impact and upside we’re really remaining in fiscal 2016 and I guess to help you with working with some of those numbers, since there's no announcement yet, I'm not going to guesstimate what a tariff will be. But if when you look at a $1 help on – $1 increase in gross profit per tire, which if we have pretty flat costs and prices go up a dollar, that’s $0.05 EPS. And, I think that’s pretty compelling if we think that we’re going to have a pretty flat cost structure and pricing inflation from the tariff. Anthony Deem – KeyBanc Capital Markets, Inc.: Just one follow-up question, are you resourcing out of China into other non-tariff countries such as Vietnam. Are you positioning for that with your three suppliers or do you anticipate sourcing out of and importing out of China primarily?

Yes, I’m not going to go into the details of that. It doesn't do anyone good on this phone for me to talk about the details of what we're doing there. Anthony Deem – KeyBanc Capital Markets, Inc.: Right.

That’s why I wanted to give you the guidance of what we expect based on the plans and discussion that we’re having. And that’s 5% to 10% increase in cost of sales on import tires in fiscal 2015. Anthony Deem – KeyBanc Capital Markets, Inc.: Thank you.

Thank you. Anthony Deem – KeyBanc Capital Markets, Inc.: Thank you very much.

And moving next to Scott Stember at Sidoti & Co. Scott Stember – Sidoti & Co.: Good morning, guys.

Good morning. Scott Stember – Sidoti & Co.: Can you may be talk about the tire deferral process, I know that we've been talking about over the last couple of years of eventually seeing a nice big rebound across the board, and it seems like, every time we have a couple of steps forward, do you have a step back? Could you just maybe talk about, where we think that is, is this going to be a situation where as long as the economy is weak in your markets, you are always going to see some kind of net pressure, and just give us some general thoughts about those headwinds that you would be facing for the next couple of years possibly?

Sure. Right now the deferral cycle is longer than it’s been in years. So, again, I think that the next step is for the consumer to shorten the deferral cycle. You bring up geography, and I think that’s a fair point, and that’s really one of the benefits of us now making some solid acquisitions in large growing southern markets, which will help us offset our exposure to some of the more northern – northeastern rust belt type markets. But I do think that there will be some pressure as long as the economy is not doing brake. And that ties into the natural hedging our business of our ability to grow the top line and grow the number of stores, grow the company. In the tougher environments, the longer it stays tough, more acquisitions and the faster growth we're going to have. We will have some comp challenges there, but at some point the consumer has to turnaround, it’s going to flip back. Scott Stember – Sidoti & Co.: Gotcha. And referring to the price increase on tiers that you alluded to the last couple, could you just tell us what the combined value of that will be as we start turning positive in the fourth quarter?

Yes, I think, I said that we would – on the same mix, and the same volume of tires, we would expect the tire comp in Q4 to be plus two, when you compare what we did last year with where we were in September. Scott Stember – Sidoti & Co.: That’s right. I'm sorry about that.

Not a problem. Scott Stember – Sidoti & Co.: Just, yes, last question on tariffs, I know this is looking to your crystal ball what is and the actual amount of the tariff, not far from decided yet. Is there any tariff out there supposing it greater than 35% where there actually could be a negative impact that you would foresee on the overall tire market, meaning, the price is too prohibitive for people to – it has a negative impact on units. Is there anything else there that you are seeing, or is it safe to assume probably in this 35% range once again?

I did – the reason that I don’t – please don’t read anything into me using 35%. What I will – that was the only region I thought that was helpful percentage to you, because that’s what happened last time. So I'm not trying to predict that in anyway. What I do know is, so whether it goes higher, I know, we're going to be doing better and we're better placed to deal with anything that hurts everybody sort of in the same direction. We're going to do better. We're even doing better than we did last time the tariff came on. Last time the tariff came on, we didn’t tell you and we were in a position to tell you that our costs would only be upside to 10%, they went up much more than that. And so even our own company, we brought it forward, we're in a stronger position, and I know that we are in a much stronger position than most of the guys out there. Sorry for the general answer, but there is a lot of strength in being able to answer generally there, because I don’t know what the tariff is going to be, I know, we are going to continue to extend our competitive advantages and continue to deliver growth through acquisitions and improved profitability, not matter what the operating environment is. Scott Stember – Sidoti & Co.: Gotcha. Thanks so much. That’s all I have.

Sure, thanks.

And we'll go next to Mike Montani at ISI Group. Michael Montani – International Strategy & Investment Group LLC: Hey, guys, thanks for taking the question. First just wanted to ask housekeeping question, can you just share the next that you have this quarter by line of category?

Yes. Brakes was 17%, tires was 42%, maintenance was 28%, exhaust was 4% and steering was 10% (inaudible). Michael Montani – International Strategy & Investment Group LLC: Okay. And then from a ticket standpoint in tires, you mentioned I think 1.5% decline in units and then about 4% down in comp. So the 2.5%, can you just break-out what was next there versus pricing?

It was all related to the import tires. So it’s all encompassing that – in that shift. Michael Montani – International Strategy & Investment Group LLC: Okay. And when you think ahead, I mean, it’s still unknown obviously for sure, if there will be a tariff and then how much it would be. But as you sit here today, is there any price increases planned in the next, say, three to six months that you can share, I mean, the July 1, I think, it was 3% to 5%, at least, on a private label side. So anything there either in tires or service that you can do proactively to get ahead of it?

We already implemented a service category, price increase of little over 1% later in the quarter – in the second quarter, so that will impact. And we continue to monitor pricing on the tire side, we are backing off of the pricing that we had at the end of the second quarter. And so that will continue to help the sales in gross profit dollars for tire. What I can say is that, we will maintain our stands in the market. We do not mean to be the lowest guys out there, but we need to be within that – within a reasonable range of competitors. And that’s something that we monitor constantly. Michael Montani – International Strategy & Investment Group LLC: And can you just remind us last time in 2009 when we had the tariff, what did you see from the branded guys, I mean, is it fair to assume that, they want to sit by and they would also like to get low single-digit plus third pricing, or what did you see in the past and how you are thinking about that?

Yes, I think they welcome the opportunity to grab some margin there. Again, from my perspective, I can't understand why there is a tariff needed, and there is an awful lot of silence from those guys in my view. And I guess, I – from a certain point I can understand that when someone hands you a margin gain, you’re tempted to take it. What would I know is, that we have a significantly growing volume, and we are going to continue to seek the right costs for the volume that we have. Michael Montani – International Strategy & Investment Group LLC: Great. And then lastly….

Yes, I mean, when you see somebody else there that’s looking good, we gain some market share at this point. But one of the challenge that I made about the tariff is, if all tire pricing goes up and consumer incomes are relatively flat, the consumer is not going to step up. They still need tires. They are going to keep their cars, they are going to continue to drive their cars, we know that’s going to happen. What they are going to look for is more value, and I think, the higher that branded pricing goes up, the more attracted the consumers, the value price tire is higher, and I'm very happy with the gains we made in our sourcing in the quality of those tires in our assortment. I think that will help us. Michael Montani – International Strategy & Investment Group LLC: Just to finish up that line of thought, I mean, in terms of unity elasticity, I mean, can you just give us any feel of historically, it seems like 3% to 5% price increase has relatively low impact on units, this quarter aside for a minute. But if you think back in the past, where is the point where you start to see some kind of a situation where the consumer may need the tire, but they just ask to deferral little extras at 10% or 20% or can you just help us think short?

Yes, I would say, this is Rob. If you go back to the last tariff, we ran plus five tire comps for the first two years, units were negatively impacted in the third year of the tariff. I would caution you though that the big difference is the deferral cycle at this juncture has never been longer, where you could only put off your tires going into winner on the yields of finally a harsh winter so long. Michael Montani – International Strategy & Investment Group LLC: Okay. Thanks, guys. Good luck.

Thank you.

And that is all the time we have for questions today. Mr. Van Heel, I would like to turn the call back over to you for any additional remarks, sir.

Thank you. Thank you all for your time this morning. While we are disappointed with our recent sales trends, we are actively managing our business to drive top line growth and earnings and look forward to having better numbers to discuss with you in January. In this operating environment, we're taking advantages – advantage of the natural hedges in our business model and competitive advantages to strengthen in relative to long-term. We appreciate your continued support and the efforts of our employees that work hard to take care of our customers every day. Thanks, again, and have a great day.

Ladies and gentlemen, once again that does conclude today’s conference, and I would like to again thank everyone for joining us.