UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended March 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____ to _____
Commission File Number 0-19357
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MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
(Full title of the plan)
MONRO MUFFLER BRAKE, INC.
200 HOLLEDER PARKWAY
ROCHESTER, NY 14615
(Name of issuer of the securities held pursuant to the
plan and address of its principal executive office)
MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
INDEX
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PAGE NO.
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Report of Independent Accountants 3
Financial Statements
Statements of Net Assets Available for Plan Benefits as of
March 31, 2003 and March 31, 2002 4
Statement of Changes in Net Assets Available for Plan Benefits
for the year ended March 31, 2003 5
Notes to Financial Statements 6
Supplemental Schedule:
Schedule of Assets (Held at End of Year) (Schedule H, Part IV (1))
March 31, 2003 10
All other schedules required by Section 2520.103-10 of the Department
of Labor Rules and Regulations for Reporting and Disclosure under ERISA
have been omitted because they are not applicable
Signature 11
Exhibit Index 12
Exhibit 23.1 - Consent of Independent Accountants 13
Exhibit 23.2 - Consent of Independent Accountants 14
Exhibit 99.1 - Certification Pursuant to 18 U.S.C. Section 1350 15
* * *
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INDEPENDENT AUDITORS' REPORT
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The Participants and Administrator of
Monro Muffler Brake, Inc. Profit Sharing Plan
We have audited the accompanying statement of net assets available for plan
benefits of the Monro Muffler Brake, Inc. Profit Sharing Plan as of March 31,
2003 and the related statement of changes in net assets available for plan
benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of the Monro Muffler Brake, Inc. Profit Sharing Plan as of March 31,
2002 were audited by other auditors whose report dated September 13, 2002,
expressed an unqualified opinion.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Monro
Muffler Brake, Inc. Profit Sharing Plan as of March 31, 2003, and the changes
of net assets available for plan benefits for the year ended March 31, 2003, in
conformity with accounting principles generally accepted in the United States
of America.
Our audit of the Plan's net assets available for plan benefits as of March 31,
2003 and the related statement of changes in net assets available for plan
benefits for the year ended March 31, 2003, was conducted for the purpose of
forming an opinion on the financial statements taken as a whole. The
supplemental information included in the schedule H, Part IV, line 4i, schedule
of assets (held at end of year) as of March 31, 2003 are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. This supplemental
information is the responsibility of the Plan's management. The supplemental
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements for the year ended March 31, 2003, and in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Davie Kaplan Chapman & Braverman, PC
September 19, 2003
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MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
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MARCH 31,
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2003 2002
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ASSETS
Cash and cash equivalents $ 9,559 $ 11,888
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Investments, at fair value 12,377,733 13,680,906
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Receivables:
Participants' contributions 122,020 93,358
Employer's contributions 119,571 93,600
Loans receivable 612,955 354,728
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Total receivables 854,546 541,686
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Total assets 13,241,838 14,234,480
LIABILITIES
Accrued expenses 35,093
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Net assets available for plan benefits $13,206,745 $14,234,480
=========== ===========
The accompanying notes are an integral part of the financial statements.
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MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
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YEAR ENDED MARCH 31,
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2003
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Employer $ 475,948
Participants 1,565,911
Rollover 106,079
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Total contributions 2,147,938
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Investment Income:
Net appreciation in fair value of investments:
Common stock 52,805
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Dividend income 237,935
Interest income 30,234
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Total additions 2,468,912
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Investment Loss:
Net depreciation in fair value of investments:
Mutual funds 2,225,547
Benefits paid to participants 1,208,153
Administrative expenses 62,947
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Total deductions 3,496,647
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Decrease in net assets available for benefits 1,027,735
Net assets available for plan benefits:
Beginning of year 14,234,480
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End of year $13,206,745
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The accompanying notes are an integral part of the financial statements.
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MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 1 - DESCRIPTION OF THE PLAN:
The following brief description of the Monro Muffler Brake, Inc. Profit Sharing
Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan documents for more complete information.
GENERAL
Monro Muffler Brake, Inc. (the employer and Plan sponsor) (the "Company")
voluntarily contributes funds to provide for retirement, termination, disability
and death benefits of plan participants.
On November 18, 1999, the Board of Directors approved amending the Plan to add a
401(k) salary deferral option. Prior to this amendment, participant fund
balances consisted solely of employer-contributed Profit Sharing amounts
adjusted for related gains/losses. In connection with this amendment, a new
trustee (the "Trustee") and custodian were appointed by the Board of Directors.
Plan assets are invested in funds designated by each participant. Participant
contributions under the 401(k) salary deferral option began in March 2000. The
legal effective date of the Plan amendment was March 1, 2000.
PARTICIPATION
Full-time, permanent employees of Monro Muffler Brake, Inc. become participants
of the Plan on the first of the month following the completion of 90 days of
service. To participate, an employee must be 21 years of age. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
CONTRIBUTIONS
Participants may contribute from 1% to 30% of their annual pre-tax compensation.
Participants may also contribute amounts representing rollovers from other
qualified plans. Contributions are subject to certain limitations as required
under the Internal Revenue Code.
Participants' contributions are matched ("401(k) Matching Contributions") by the
Company in an amount determined by the Board of Directors of the Company. The
Board has currently decided to match the amount of $.50 for every dollar
contributed, up to 4% of the participant's pre-tax compensation. The Company
does not make a matching contribution on employee contributions greater than 4%.
Additionally, the Company may contribute to the Plan an additional amount,
either in the form of a "Profit Sharing Contribution", or in the form of an
additional match on 401(k) participant contributions, based on the sole
discretion of the Board of Directors.
VESTING
Profit Sharing Contributions are allocated by the custodian based on the
proportionate share of wages earned by each participant in relation to the total
qualified wages for all participants in the Plan.
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MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
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Participants are immediately vested in their own salary reduction contributions
plus actual earnings thereon. Vesting in the Company 401(k) Matching
Contribution portion of their accounts, plus actual earnings thereon, is based
on years of service as defined in the Plan. A participant vests 25% at the end
of his/her second year of service, and an additional 25% each year thereafter.
Participants become 100% vested in the Company's Profit Sharing Contributions at
the end of five years of service with no vesting in prior years.
Forfeited balances of terminated participants' nonvested accounts are used to
reduce future Company contributions and to pay administrative expenses of the
Plan. Forfeited accounts used to reduce company contributions amounted to
approximately $29,000 and $35,000 for the years ended March 31, 2003 and 2002,
respectively. At March 31, 2003 and 2002, remaining forfeitures available to
offset future contributions were approximately $9,000 and $11,000, respectively.
INVESTMENT OPTIONS
All investment options are participant-directed. Participants may change their
investment options daily.
PARTICIPANT LOANS
Participants may borrow from their 401(k) and profit sharing fund accounts in
various amounts as specified by the Plan. Loans must be a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50% of their vested account
balances. Loan terms range from one to five years, or up to ten years for
purchase of a primary residence. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates as determined by the Benefits Committee. Principal and interest
are paid ratably through payroll deductions. Loans of approximately $467,000 and
$279,000 were granted during the years ended March 31, 2003 and 2002,
respectively.
ADMINISTRATION
The Monro Muffler Brake, Inc. Benefits Committee is solely responsible for the
general administration of the Plan and carrying out the Plan provisions. The
Company reserves the right, by action of the Board of Directors, to discontinue
contributions and terminate the Plan at any time. In the event of a termination
of the Plan, each participant shall immediately become fully vested. The Trustee
of the Plan's assets is Investors Bank & Trust Company of Boston. The custodian
is Diversified Investment Advisors.
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MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
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ADMINISTRATIVE EXPENSES
Plan expenses are primarily paid by the Plan.
BENEFIT PAYMENTS
Benefits are recorded when paid.
NOTE 2 - SUMMARY OF ACCOUNTING PRINCIPLES AND PRACTICES:
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared using the accrual basis
of accounting in conformity with accounting principles generally accepted in the
United States.
REVENUE RECOGNITION
Income on plan assets is accrued when earned, and gains or losses on the
disposition of such assets are recorded when realized.
VALUATION OF INVESTMENT ASSETS
Plan assets are reported at fair market value measured by quoted prices in an
active market as of the Plan year-end date. Mutual fund investments are valued
at net asset value representing the value at which shares of the fund may be
purchased or redeemed.
The Plan presents, in the Statement of Changes in Net Assets, the net
appreciation (depreciation) in the fair value of its investments, which consists
of the realized gains or losses and the unrealized appreciation (depreciation)
of those investments.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of net assets
available for benefits and changes therein. Actual results could differ from
those estimates.
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MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
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RISKS AND UNCERTAINTIES
Investment securities are exposed to various risks, such as interest rate and
market risks. Due to the level of risk associated with certain investments and
the level of uncertainty related to changes in the value of investments, it is
at least reasonably possible that changes in risk in the near term would
materially affect participants' account balances and the amount reported in the
Statement of Net Assets Available for Plan Benefits and the Statement of Changes
in Net Assets Available for Plan Benefits.
NOTE 3 - INVESTMENTS:
The following table presents the fair values of investments held by the Plan's
trustees. Investments that represent five per cent or more of the Plan's net
assets available for benefits are separately identified.
MARCH 31,
2003 2002
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COMMON STOCKS $ 376,394 $ 183,958
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MUTUAL FUNDS
Stock Index 797,901 941,977
High Quality Bond 981,234 824,453
Intermediate Horizon SAF* 3,405,871 4,320,716
Intermediate/Long Horizon SAF* 1,420,986 1,496,595
Long Horizon SAF* 1,737,174 1,783,056
Other 3,658,173 4,130,151
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TOTAL MUTUAL FUNDS 12,001,339 13,496,948
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$12,377,733 $13,680,906
=========== ===========
* SAF - Strategic Allocation Fund
NOTE 4 - PARTY-IN-INTEREST TRANSACTIONS:
The Plan held investments in Company securities with a fair value of
approximately $376,000 and $184,000 as of March 31, 2003 and 2002, respectively.
NOTE 5 - BENEFIT OBLIGATIONS:
Benefit obligations for persons who have withdrawn from participation in the
Plan were approximately $1,852,000 and $1,797,000 at March 31, 2003 and
2002, respectively.
NOTE 6 - FEDERAL INCOME TAX STATUS:
The Plan administrator has obtained a favorable determination letter from the
Internal Revenue Service, which qualifies the Plan under Section 401(a) of the
Internal Revenue Code (the "Code"). The Plan has been amended since receiving
the determination letter. However, the Plan administrator believes that the Plan
is designed and is currently being operated in compliance with the applicable
requirements of the Code.
NOTE 7 - RELATED PARTY TRANSACTIONS:
The Plan invests in shares of mutual funds managed by an affiliate of
Diversified Investment Advisors. Diversified acts as trustee for only those
investments as defined by the Plan. Transactions in such investments qualify as
party-in-interest transactions, which are exempt from prohibited transaction
rules.
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MONRO MUFFLER BRAKE, INC.
PROFIT SHARING PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR) SCHEDULE H
MARCH 31, 2003 PAGE 1 OF 1
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DIVERSIFIED INVESTMENT ADVISORS
IDENTITY OF ISSUE,
BORROWER, LESSOR DESCRIPTION CURRENT
OR SIMILAR PARTY OF INVESTMENT VALUE
--------------------------------------------------- -------------------- ----------------
Diversified Investment Money Market Fund** Mutual Funds $ 343,545
Diversified Investment High Quality Bond Fund** Mutual Funds 981,234
Diversified Investment Core Bond Fund** Mutual Funds 502,681
Diversified Investment Stock Index** Mutual Funds 797,901
Diversified Investment Value & Income Fund** Mutual Funds 479,275
Diversified Investment Growth & Income Fund** Mutual Funds 503,282
Diversified Investment Equity Growth Fund** Mutual Funds 446,053
Diversified Investment Special Equity Fund** Mutual Funds 495,416
Diversified Investment International Equity Fund** Mutual Funds 433,880
*Diversified Investment Short Horizon SAF** Mutual Funds 225,677
*Diversified Investment Short/Intermediate Horizon SAF** Mutual Funds 228,364
*Diversified Investment Intermediate Horizon SAF** Mutual Funds 3,405,871
*Diversified Investment Intermediate/Long Horizon SAF** Mutual Funds 1,420,986
*Diversified Investment Long Horizon SAF** Mutual Funds 1,737,174
Diversified Investment Monro Stock Fund** Mutual Funds 376,394
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$12,377,733
Participant Loans:
Notes Receivable Maturing through
March, 2008 at 5.25%-10.5% 612,955
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$12,990,688
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* SAF - Strategic Allocation Fund
** Indicates a party-in-interest to the Plan
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Monro
Muffler Brake, Inc., as Administrator, has duly caused this Annual Report to be
signed on its behalf by the undersigned hereunto duly authorized.
Monro Muffler Brake, Inc.
AS ADMINISTRATOR OF
Monro Muffler Brake, Inc.
Profit Sharing Plan
DATE: September 26, 2003 By /s/ Catherine D'Amico
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Catherine D'Amico
Executive Vice President - Finance and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
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23.1 Consent of Davie Kaplan Chapman & Braverman, PC, Independent
Accountants, dated September 26, 2003
23.2 Consent of PricewaterhouseCoopers LLP, Independent
Accountants, dated September 24, 2003
99.1 Certification Pursuant to 18 U.S.C. Section 1350
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