Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=181852
Story Retrieval Date: 5/19/2013 9:35:52 AM CST
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Bloomberg LP/Moran Zhang/MEDILL
The company's stock was last traded at $8.20.
Midas Inc. swings to profit in Q4, but slow on revealing arbitration result
by moran zhang
March 03, 2011
Shortly after its earnings conference call, Midas posted a press release saying that its officials were reviewing the contents of the ruling from the arbitral tribunal in Geneva, Switzerland, and would issue a press release later in the day. The arbitration costs had a negative after tax impact of 10 cents per diluted share for fiscal year 2010.
The company said it requested that the New York Stock Exchange halt trading in its shares. Prior to the trading halt, Midas shares jumped more than 10 percent to $8.20, or 76 cents, from $7.44 at Wednesday’s close.
No one at the Itasca, Ill.-based automotive services provider could be reached late Thursday.
Midas reported net income of $300,000, or 2 cents per diluted share, compared with a net loss of $200,000, or 2 cents per share, in the year-ago period. Analysts polled by Zacks Investment Research Inc. were expecting 7 cents per diluted share.
Fourth quarter results were negatively affected by losses from the Northern California shops acquired from a failing franchisee, as well as higher pension and incentive compensation expenses.
Alan Feldman, Midas’ chairman and chief executive officer, pointed to gains in retail sales at Midas shops in the U.S., with U.S. comparable shop sales up by 3.7 percent during the quarter.
“These trends are continuing into 2011, which got off to a slow start in January with bad weather affecting several regions of the U.S.,” Feldman said. “Sales have rebounded in February and preliminary results for the first two months of the quarter show U.S comparable shop sales are up nearly two percent.”
Sales increased 2 percent in the quarter to $46.6 million, from $45.7 million in the same period a year ago.
For the full year, Midas earned $2.6 million, or 18 cents per diluted share, flat with 2009 results. Sales rose more than 5 percent in 2010 to $192.4 million from $182.8 million in the previous year.
As of December 31, 2010, Midas ran 46 co-branded shops, including 16 SpeeDee shops that have added Midas repairs and services and 29 Midas shops that have added SpeeDee oil change services.
Feldman said Midas will continue marketing and operations programs in 2011, such as “value-priced oil changes,” that build retail sales at Midas and SpeeDee shops.
Feldman said the company expects to co-brand between 25 and 50 additional shops in 2011.
