SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended March 29, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number: 01-13409





MIDAS, INC.

(Exact Name of Registrant as Specified in its Charter)







|                                                                |  |                                     
|--------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                        |  | 36-4180556                          
|(State or Other Jurisdiction of Incorporation or Organization ) |  | (I.R.S. Employer Identification No.)
|                                                                | 
|1300 Arlington Heights Road, Itasca, Illinois                   |  | 60143                               
|(Address of Principal Executive Offices)                        |  | (Zip Code)                          

(630) 438-3000

(Registrants telephone number, including area code)





Indicate by check mark whether
the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO   ̈

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer, as defined in Rule 12b-2 of
the Exchange Act.

Large Accelerated Filer   ̈    Accelerated
Filer  x    Non-Accelerated Filer   ̈    Smaller Reporting Company   ̈

Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange
Act)    YES   ̈    NO  x

The number of shares of the Registrants Common Stock, $.001 par value per share, outstanding as of April 26, 2008 was 13,830,394.









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PART I. FINANCIAL INFORMATION



|Item 1: | Condensed Financial Statements
|------- | ------------------------------

MIDAS, INC.

CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except for earnings per share)



|                                                             |  |                                   |      |   |            |   |      |  
|------------------------------------------------------------ |  | --------------------------------- | ---- | - | ---------- | - | ---- | -
|                                                             |  | For the quarterended fiscal March |     
|                                                             |  | 2008                              |      |   | 2007       |  
|                                                             |  | (13 weeks)                        |      |   | (13 weeks) |  
|Sales and revenues:                                          |  |                                   |      |   |            |   |      |  
|Franchise royalties and license fees                         |  | $                                 | 13.3 |   |            | $ | 14.7 |  
|Real estate revenues from franchised shops                   |  |                                   | 8.7  |   |            |   | 9.0  |  
|Company-operated shop retail sales                           |  |                                   | 14.9 |   |            |   | 9.5  |  
|Replacement part sales and product royalties                 |  |                                   | 6.7  |   |            |   | 7.0  |  
|Software sales and maintenance revenue                       |  |                                   | 1.2  |   |            |   | 1.1  |  
|                                                             |  |                                   |      |   |            |   |      |  
|Total sales and revenues                                     |  |                                   | 44.8 |   |            |   | 41.3 |  
|                                                             |  |                                   |      |   |            |   |      |  
|Operating costs and expenses:                                |  |                                   |      |   |            |   |      |  
|Franchised shops  occupancy expenses                        |  |                                   | 5.8  |   |            |   | 5.5  |  
|Company-operated shop parts cost of sales                    |  |                                   | 3.8  |   |            |   | 2.3  |  
|Company-operated shop payroll and employee benefits          |  |                                   | 6.2  |   |            |   | 3.9  |  
|Company-operated shop occupancy and other operating expenses |  |                                   | 5.0  |   |            |   | 3.1  |  
|Replacement part cost of sales                               |  |                                   | 6.1  |   |            |   | 5.5  |  
|Warranty expense                                             |  |                                   | 0.1  |   |            |   | 1.1  |  
|Selling, general, and administrative expenses                |  |                                   | 13.2 |   |            |   | 13.6 |  
|Loss on sale of assets, net                                  |  |                                   | 0.3  |   |            |   |     |  
|Business transformation charges                              |  |                                   | 0.2  |   |            |   | 0.5  |  
|                                                             |  |                                   |      |   |            |   |      |  
|Total operating costs and expenses                           |  |                                   | 40.7 |   |            |   | 35.5 |  
|Operating income                                             |  |                                   | 4.1  |   |            |   | 5.8  |  
|Interest expense                                             |  |                                   | (2.2 | ) |            |   | (2.2 | )
|Other income, net                                            |  |                                   | 0.2  |   |            |   | 0.1  |  
|                                                             |  |                                   |      |   |            |   |      |  
|Income before income taxes                                   |  |                                   | 2.1  |   |            |   | 3.7  |  
|Income tax expense                                           |  |                                   | 0.8  |   |            |   | 1.5  |  
|                                                             |  |                                   |      |   |            |   |      |  
|Net income                                                   |  | $                                 | 1.3  |   |            | $ | 2.2  |  
|                                                             |  |                                   |      |   |            |   |      |  
|Earnings per share:                                          |  |                                   |      |   |            |   |      |  
|Basic                                                        |  | $                                 | 0.10 |   |            | $ | 0.15 |  
|                                                             |  |                                   |      |   |            |   |      |  
|Diluted                                                      |  | $                                 | 0.09 |   |            | $ | 0.14 |  
|                                                             |  |                                   |      |   |            |   |      |  
|Average number of shares:                                    |  |                                   |      |   |            |   |      |  
|Common shares outstanding                                    |  |                                   | 13.3 |   |            |   | 14.4 |  
|Common stock warrants                                        |  |                                   | 0.1  |   |            |   | 0.1  |  
|                                                             |  |                                   |      |   |            |   |      |  
|Shares applicable to basic earnings                          |  |                                   | 13.4 |   |            |   | 14.5 |  
|Equivalent shares on outstanding stock awards                |  |                                   | 0.5  |   |            |   | 0.5  |  
|                                                             |  |                                   |      |   |            |   |      |  
|Shares applicable to diluted earnings                        |  |                                   | 13.9 |   |            |   | 15.0 |  
|                                                             |  |                                   |      |   |            |   |      |  

See notes to condensed financial statements.



1



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MIDAS, INC.

CONDENSED BALANCE SHEETS

(In millions, except per share data)



|                                                                                                              |  |                 |       |   |                    |   |       |  
|------------------------------------------------------------------------------------------------------------- |  | --------------- | ----- | - | ------------------ | - | ----- | -
|                                                                                                              |  | FiscalMarch2008 |       |   | FiscalDecember2007 |  
|                                                                                                              |  | (Unaudited)     |       |   |                    |  
|Assets:                                                                                                       |  |                 |       |   |                    |   |       |  
|Current assets:                                                                                               |  |                 |       |   |                    |   |       |  
|Cash and cash equivalents                                                                                     |  | $               | 2.2   |   |                    | $ | 1.3   |  
|Receivables, net                                                                                              |  |                 | 28.0  |   |                    |   | 30.4  |  
|Inventories                                                                                                   |  |                 | 3.5   |   |                    |   | 3.2   |  
|Deferred income taxes                                                                                         |  |                 | 12.3  |   |                    |   | 12.4  |  
|Prepaid assets                                                                                                |  |                 | 3.9   |   |                    |   | 3.9   |  
|Other current assets                                                                                          |  |                 | 2.5   |   |                    |   | 3.9   |  
|                                                                                                              |  |                 |       |   |                    |   |       |  
|Total current assets                                                                                          |  |                 | 52.4  |   |                    |   | 55.1  |  
|Property and equipment, net                                                                                   |  |                 | 95.9  |   |                    |   | 96.6  |  
|Goodwill and other intangible assets, net                                                                     |  |                 | 14.6  |   |                    |   | 14.0  |  
|Deferred income taxes                                                                                         |  |                 | 40.2  |   |                    |   | 41.2  |  
|Other assets                                                                                                  |  |                 | 9.9   |   |                    |   | 10.8  |  
|                                                                                                              |  |                 |       |   |                    |   |       |  
|Total assets                                                                                                  |  | $               | 213.0 |   |                    | $ | 217.7 |  
|                                                                                                              |  |                 |       |   |                    |   |       |  
|Liabilities and equity:                                                                                       |  |                 |       |   |                    |   |       |  
|Current liabilities:                                                                                          |  |                 |       |   |                    |   |       |  
|Current portion of long-term obligations                                                                      |  | $               | 1.7   |   |                    | $ | 1.7   |  
|Current portion of accrued warranty                                                                           |  |                 | 3.4   |   |                    |   | 3.5   |  
|Accounts payable                                                                                              |  |                 | 17.4  |   |                    |   | 16.8  |  
|Accrued expenses                                                                                              |  |                 | 21.4  |   |                    |   | 24.5  |  
|                                                                                                              |  |                 |       |   |                    |   |       |  
|Total current liabilities                                                                                     |  |                 | 43.9  |   |                    |   | 46.5  |  
|Long-term debt                                                                                                |  |                 | 72.6  |   |                    |   | 76.3  |  
|Obligations under capital leases                                                                              |  |                 | 2.1   |   |                    |   | 2.2   |  
|Finance lease obligation                                                                                      |  |                 | 32.6  |   |                    |   | 32.9  |  
|Accrued warranty                                                                                              |  |                 | 20.2  |   |                    |   | 21.3  |  
|Other liabilities                                                                                             |  |                 | 8.8   |   |                    |   | 6.9   |  
|                                                                                                              |  |                 |       |   |                    |   |       |  
|Total liabilities                                                                                             |  |                 | 180.2 |   |                    |   | 186.1 |  
|                                                                                                              |  |                 |       |   |                    |   |       |  
|Temporary equity:                                                                                             |  |                 |       |   |                    |   |       |  
|Non-vested restricted stock subject to redemption                                                             |  |                 | 4.6   |   |                    |   | 4.4   |  
|                                                                                                              |  |                
|Shareholders equity:                                                                                         |  |                 |       |   |                    |   |       |  
|Common stock ($.001 par value, 100 million shares authorized, 17.7 million shares issued) and paid-in capital |  |                 | 9.5   |   |                    |   | 8.8   |  
|Treasury stock, at cost (3.9 million shares)                                                                  |  |                 | (80.8 | ) |                    |   | (81.0 | )
|Retained income                                                                                               |  |                 | 103.7 |   |                    |   | 102.4 |  
|Accumulated other comprehensive loss                                                                          |  |                 | (4.2  | ) |                    |   | (3.0  | )
|                                                                                                              |  |                 |       |   |                    |   |       |  
|Total shareholders equity                                                                                    |  |                 | 28.2  |   |                    |   | 27.2  |  
|                                                                                                              |  |                 |       |   |                    |   |       |  
|Total liabilities and shareholders equity                                                                    |  | $               | 213.0 |   |                    | $ | 217.7 |  
|                                                                                                              |  |                 |       |   |                    |   |       |  

See notes to condensed financial statements.



2



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MIDAS, INC.

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)



|                                                                                                                          |  |                                        |      |   |      |   |      |  
|------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | ---- | - | ---- | - | ---- | -
|                                                                                                                          |  | For the three monthsended fiscal March |     
|                                                                                                                          |  | 2008                                   |      |   | 2007 |  
|Cash flows from operating activities:                                                                                     |  |                                        |      |   |      |   |      |  
|Net income                                                                                                                |  | $                                      | 1.3  |   |      | $ | 2.2  |  
|Adjustments reconciling net income to net cash provided by operating activities:                                          |  |                                        |      |   |      |   |      |  
|Depreciation and amortization                                                                                             |  |                                        | 2.6  |   |      |   | 2.3  |  
|Stock-based compensation                                                                                                  |  |                                        | 0.9  |   |      |   | 1.2  |  
|Amortization of financing fees and change in debt swap valuation                                                          |  |                                        | 0.1  |   |      |   | 0.1  |  
|Business transformation charges                                                                                           |  |                                        | 0.2  |   |      |   | 0.5  |  
|Deferred income taxes                                                                                                     |  |                                        | 1.1  |   |      |   | 1.5  |  
|Loss on sale of assets                                                                                                    |  |                                        | 0.3  |   |      |   |     |  
|Cash outlays for business transformation costs                                                                            |  |                                        | (0.2 | ) |      |   | (1.5 | )
|Changes in assets and liabilities, exclusive of effects of business transformation charges, acquisitions and dispositions |  |                                        | 0.6  |   |      |   | (3.0 | )
|                                                                                                                          |  |                                        |      |   |      |   |      |  
|Net cash provided by operating activities                                                                                 |  |                                        | 6.9  |   |      |   | 3.3  |  
|                                                                                                                          |  |                                        |      |   |      |   |      |  
|Cash flows from investing activities:                                                                                     |  |                                        |      |   |      |   |      |  
|Capital investments                                                                                                       |  |                                        | (1.9 | ) |      |   | (0.4 | )
|Cash paid for acquired businesses                                                                                         |  |                                        | (0.7 | ) |      |   | (0.3 | )
|Proceeds from sales of assets                                                                                             |  |                                        | 0.1  |   |      |   | 0.7  |  
|                                                                                                                          |  |                                        |      |   |      |   |      |  
|Net cash used in investing activities                                                                                     |  |                                        | (2.5 | ) |      |   |     |  
|                                                                                                                          |  |                                        |      |   |      |   |      |  
|Cash flows from financing activities:                                                                                     |  |                                        |      |   |      |   |      |  
|Net borrowings (repayments) under revolving lines of credit                                                               |  |                                        | (3.7 | ) |      |   | 5.9  |  
|Increase (decrease) in outstanding checks                                                                                 |  |                                        | 0.5  |   |      |   | (3.5 | )
|Payment of principal obligations under capital leases                                                                     |  |                                        | (0.2 | ) |      |   | (0.3 | )
|Payment of principal obligations under finance lease                                                                      |  |                                        | (0.2 | ) |      |   | (0.2 | )
|Cash received for common stock                                                                                            |  |                                        | 0.1  |   |      |   | 1.0  |  
|Cash paid for treasury shares                                                                                             |  |                                        |     |   |      |   | (7.0 | )
|                                                                                                                          |  |                                        |      |   |      |   |      |  
|Net cash used in financing activities                                                                                     |  |                                        | (3.5 | ) |      |   | (4.1 | )
|                                                                                                                          |  |                                        |      |   |      |   |      |  
|Net change in cash and cash equivalents                                                                                   |  |                                        | 0.9  |   |      |   | (0.8 | )
|Cash and cash equivalents at beginning of period                                                                          |  |                                        | 1.3  |   |      |   | 2.4  |  
|                                                                                                                          |  |                                        |      |   |      |   |      |  
|Cash and cash equivalents at end of period                                                                                |  | $                                      | 2.2  |   |      | $ | 1.6  |  
|                                                                                                                          |  |                                        |      |   |      |   |      |  

See notes to condensed financial statements.



3



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MIDAS, INC.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited)

(In millions)



|                                                       |  |                                |  |        |                |   |        |          |   |               |   |       |                               |  |        |       |  |      |      |   |  |   |      |  
|------------------------------------------------------ |  | ------------------------------ |  | ------ | -------------- | - | ------ | -------- | - | ------------- | - | ----- | ----------------------------- |  | ------ | ----- |  | ---- | ---- | - |  | - | ---- | -
|                                                       |  | Common StockAnd Paid InCapital |  |        | Treasury Stock |   |        | Retained |   | Comprehensive |   |       | AccumulatedOtherComprehensive | 
|                                                       |  | Shares                         |  | Amount |                |   | Shares |          |   | Amount        |   |       | Income                        |  | Income |       |  | Loss |     
|Fiscal year end 2007                                   |  | 17.7                           |  | $      | 8.8            |   |        | (3.9     | ) |               | $ | (81.0 | )                             |  | $      | 102.4 |  |      |      |   |  | $ | (3.0 | )
|Stock option transactions                              |  |                               |  |        | (0.1           | ) |        |         |   |               |   | 0.2   |                               |  |        |      |  |      |      |   |  |   |     |  
|Stock option expense                                   |  |                               |  |        | 0.4            |   |        |         |   |               |   |      |                               |  |        |      |  |      |      |   |  |   |     |  
|Restricted stock vesting                               |  |                               |  |        | 0.4            |   |        |         |   |               |   |      |                               |  |        |      |  |      |      |   |  |   |     |  
|Net income                                             |  |                               |  |        |               |   |        |         |   |               |   |      |                               |  |        | 1.3   |  | $    | 1.3  |   |  |   |     |  
|Other comprehensive income                             |  |                                |  |        |                |   |        |          |   |               |   |       |                               |  |        |       |  |      |      |   |  |   |      |  
| foreign currency translation                         |  |                               |  |        |               |   |        |         |   |               |   |      |                               |  |        |      |  |      | (0.4 | ) |  |   | (0.4 | )
| loss on derivative financial instruments, net of tax |  |                               |  |        |               |   |        |         |   |               |   |      |                               |  |        |      |  |      | (0.8 | ) |  |   | (0.8 | )
|                                                       |  |                                |  |        |                |   |        |          |   |               |   |       |                               |  |        |       |  |      |      |   |  |   |      |  
|Comprehensive income                                   |  |                               |  |        |               |   |        |         |   |               |   |      |                               |  |        |      |  | $    | 0.1  |   |  |   |     |  
|                                                       |  |                                |  |        |                |   |        |          |   |               |   |       |                               |  |        |       |  |      |      |   |  |   |      |  
|Fiscal first quarter end 2008                          |  | 17.7                           |  | $      | 9.5            |   |        | (3.9     | ) |               | $ | (80.8 | )                             |  | $      | 103.7 |  |      |      |   |  | $ | (4.2 | )
|                                                       |  |                                |  |        |                |   |        |          |   |               |   |       |                               |  |        |       |  |      |      |   |  |   |      |  

See notes to condensed financial statements.



4



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MIDAS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

1. Financial Statement Presentation

The condensed interim period financial statements presented herein do not include all of the information and disclosures customarily provided in annual
financial statements and they have not been audited, as permitted by the rules and regulations of the Securities and Exchange Commission. The condensed interim period financial statements should be read in conjunction with the annual financial
statements included in the annual report on Form 10-K for the fiscal year ended December 29, 2007. In the opinion of management, these financial statements have been prepared in conformity with accounting principles generally accepted in the
United States and reflect all adjustments necessary for a fair statement of the results of operations and cash flows for the interim periods ended March 29, 2008 (first quarter fiscal 2008) and March 31, 2007 (first
quarter fiscal 2007) and of its financial position as of March 29, 2008. All such adjustments are of a normal recurring nature. The results of operations for the first quarter of fiscal 2008 and 2007 are not necessarily indicative of the
results of operations for the full year.

The unaudited condensed financial statements present the consolidated financial information for
Midas, Inc. and its wholly-owned subsidiaries (Midas or the Company). The unaudited condensed financial statements for the quarters ended March 29, 2008 and March 31, 2007 both cover a 13-week period. All
significant inter-company balances and transactions have been eliminated in consolidation.

Certain reclassifications have been made to the
previously reported fiscal 2007 financial statements in order to provide consistency with the fiscal 2008 results. These reclassifications did not affect previously reported operating income, income before income taxes, net income or earnings per
share. In 2008, the Company accounted for product royalty revenue and replacement part cost of sales net of rebates received from its suppliers. In prior periods, product royalty revenue and replacement part cost of sales were presented gross of
supplier rebates received. The prior periods in the Statement of Operations have been revised to conform to the current year presentation. The effect of this change in presentation on the amounts previously reported for 2007 was not material.

Basic and diluted earnings per share were calculated based on the following share counts (in millions):



|                                           |  |                                   |  |     
|------------------------------------------ |  | --------------------------------- |  | ----
|                                           |  | For the quarterended fiscal March
|                                           |  | 2008                              |  | 2007
|Weighted-average common shares outstanding |  | 13.3                              |  | 14.4
|Common stock warrants                      |  | 0.1                               |  | 0.1 
|                                           |  |                                   |  |     
|Shares applicable to basic earnings        |  | 13.4                              |  | 14.5
|Effect of dilutive stock awards            |  | 0.5                               |  | 0.5 
|                                           |  |                                   |  |     
|Shares applicable to diluted earnings      |  | 13.9                              |  | 15.0
|                                           |  |                                   |  |     
|Potential common share equivalents:        |  |                                   |  |     
|Stock options                              |  | 1.3                               |  | 1.2 

Franchise royalties are recognized in the periods that correspond to the periods in which retail
sales and revenues are recognized by franchisees. Franchise renewal fees are recognized when the new franchise agreement is signed by the franchisee, the renewal period commences and all contractual obligations have been met. Product royalties are
recognized as earned based on the volume of franchisee purchases of products from certain vendors. Real estate revenues are recognized as earned on a monthly basis in accordance with underlying property lease terms using the straight-line method.
The majority of real estate revenues are derived from Midas shop locations. Nearly all of these locations are subject to an annual percentage rent based upon the locations retail sales volume for the calendar year. Replacement part sales are
recognized at the time products are shipped. Sales and revenues of company-operated shops are recognized when customer vehicles are repaired or serviced. Taxes collected on behalf of taxing authorities are not recognized as revenue but rather are
recorded as a liability and remitted to the proper taxing authority.



5



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2. Supplemental Cash Flow Activity

Net cash flows from operating activities reflect cash payments for interest and taxes as follows (in millions):



|                  |  |                                        |     |      |   |    
|----------------- |  | -------------------------------------- | --- | ---- | - | ---
|                  |  | For the three monthsended fiscal March
|                  |  | 2008                                   |     | 2007
|Interest paid     |  | $                                      | 2.1 |      | $ | 2.0
|Income taxes paid |  |                                        | 0.2 |      |   | 0.2

The acquisition of certain company-operated shops resulted in non-cash reductions of accounts
receivable of approximately $0.6 million and $0.1 million during the first three months of fiscal 2008 and 2007, respectively.

3. Inventories

Inventories were composed of finished goods in both the quarter ended March 29, 2008 and the year ended December 29, 2007.

4. Business Transformation Activities

In
fiscal 2006, the Company launched a major update to its retail shop image. The new image program incorporates changes to internal shop appearance and merchandising, as well as a significant redesign of the Midas shop façade. Midas management
believes the new image will better showcase the Companys expansion into new services, enhance efforts to educate customers and significantly increase the visibility and curb appeal of the typical Midas shop. The Company expects a majority of
Midas shops throughout North America to adopt the new shop image. In order to encourage Midas dealers to adopt this new image, the Company agreed to fund certain planning, development, material and installation costs expected to average
approximately $2,600 per shop. The Company also expects to pay the full cost of the image upgrade for its company-operated shops as well as certain shops being transitioned between owners.

As a result, the Company recorded charges of $4.1 million during fiscal 2007 and fiscal 2006 related to this program, and Midas management expects that
it will result in additional business transformation costs during fiscal 2008, including $0.2 million recorded in the first three months of 2008.

5. Debt
Agreements

On October 27, 2005, the Company entered into a five-year, unsecured $110 million revolving credit facility. On
February 4, 2008, the Company amended the loan by increasing the revolving credit facility to $130 million. The amended facility is further expandable to $165 million at the Companys discretion with lender approval. The interest rate
floats based on the underlying rate of LIBOR and the Companys leverage. This facility requires maintenance of certain financial covenants including maximum allowable leverage and minimum tangible net worth. The Company is in compliance with
all covenants. As of March 29, 2008, the interest rate on the Companys revolving loan borrowings was priced at LIBOR plus 1.25%.

As of March 29, 2008, a total of $72.6 million was outstanding under the revolving credit facility. As of December 29, 2007, a total of $76.3 million was outstanding under the revolving credit facility.

In November 2005, $20 million in senior bank debt was converted from floating rate to fixed rate by locking-in LIBOR at 4.89% for a five year period. In
addition, in March 2007, the Company entered into an interest rate swap arrangement to convert an additional $25 million in senior bank debt from floating rate to a fixed rate by locking-in LIBOR at 4.91% for the remaining term of the Companys
bank agreement (October 2010). This swap effectively replaced a declining balance swap that expired in March 2007 under which LIBOR was locked-in at 2.76% for a three-year term. As a consequence, currently $45 million of the Companys $72.6
million in senior bank debt is at fixed rates.

Both the November 2005 and March 2007 swap arrangements have been designated as cash flow
hedges and have been evaluated to be highly effective. As a result, the after-tax change in the fair value of these swaps is recorded in accumulated other comprehensive income as a gain or loss on derivative financial instruments. As of
March 29, 2008, the fair value of these instruments was a pre-tax loss of approximately $2.5 million.



6



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6. Pension Plans

Certain Midas employees are covered under various defined benefit pension plans sponsored and funded by Midas. Plans covering salaried and hourly corporate employees provide pension benefits based on years of service, and generally are
limited to a maximum of 20% of the employees average annual compensation during the five years preceding retirement. Plan assets are invested primarily in common stocks, corporate bonds, and government securities. The Company does not expect
to make material contributions to the various plans in fiscal 2008.

The components of net periodic pension cost recognized for the interim
periods are presented in the following table (in millions):



|                                              |  |                                   |      |   |      |   |      |  
|--------------------------------------------- |  | --------------------------------- | ---- | - | ---- | - | ---- | -
|                                              |  | For the quarter endedfiscal March |     
|                                              |  | 2008                              |      |   | 2007 |  
|Service cost                                  |  | $                                 | 0.2  |   |      | $ | 0.3  |  
|Interest cost on projected benefit obligation |  |                                   | 0.8  |   |      |   | 0.7  |  
|Expected return on assets                     |  |                                   | (1.1 | ) |      |   | (1.1 | )
|Net amortization and deferral                 |  |                                   |     |   |      |   | 0.1  |  
|                                              |  |                                   |      |   |      |   |      |  
|Total net periodic pension benefit            |  | $                                 | (0.1 | ) |      | $ |     |  
|                                              |  |                                   |      |   |      |   |      |  

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R), (SFAS 158). The Company adopted SFAS 158 on December 30, 2006, which resulted in a $7.0 million reduction in other
assets, a $2.8 million increase in deferred tax assets, a $0.2 million increase in other liabilities and a $4.4 million increase in accumulated other comprehensive loss. The adoption had no impact on the Companys results of operations or cash
flows.

SFAS 158 also requires an employer to measure plan assets and benefit obligations as of the balance sheet date effective for periods
ending after December 15, 2008. On December 30, 2007 the Company adopted this provision by recording adjustments to opening balances which resulted in a $110,000 increase in other assets, a $40,000 reduction in deferred income taxes, a
$50,000 increase in retained earnings and a $20,000 reduction in accumulated other comprehensive loss. The adoption of SFAS 158 had no impact on cash provided by operating activities.

7. Stock-Based Compensation and Other Equity Instruments

On January 1, 2006, the Company adopted the
provisions of Statement of Financial Accounting Standard (SFAS) No. 123R (SFAS 123R) and now records an expense for outstanding unvested stock option awards based on the grant-date fair value of those awards. The fair value of stock option
awards has been determined using the Black-Scholes option pricing model and the Modified Prospective Application method of adoption as allowed under SFAS 123R.

The Company did not record an excess tax benefit in the first three months of fiscal 2008 or fiscal 2007 related to stock-based compensation plans or equity instruments. The Company is in a net operating loss
carry-forward position for the first three months of fiscal 2008 and 2007. As a result, the excess tax benefit is not recognized until the deduction reduces the Companys income taxes payable which occurs once the net operating loss has
been fully utilized. Therefore there was no impact on cash flows from operating activities or cash flows from financing activities in the Statement of Cash Flows.

Stock Options

The Midas Stock Incentive Plan, the Midas Treasury Stock Plan and the Midas
Directors Deferred Compensation Plan (the Plans) authorize the issuance of up to 4,806,886 shares of Midas common stock pursuant to the exercise of incentive stock options, non-qualified stock options and stock appreciation rights
and the grant of restricted stock and performance awards. Options granted pursuant to the Plans generally vest over a period of five years commencing one year after the date of grant. It is the Companys policy to issue shares out of treasury
when options are exercised. The following table summarizes information regarding the outstanding stock options as of March 29, 2008:



|                                    |  |                 |   |  |                     |              |                               |   |                                                    |  |                                       |  |   |    
|----------------------------------- |  | --------------- | - |  | ------------------- | ------------ | ----------------------------- | - | -------------------------------------------------- |  | ------------------------------------- |  | - | ---
|                                    |  | Number ofShares |   |  | Option Price Ranges |              | WeightedAverageExercise Price |   | WeightedAverageRemainingContractual Term(in years) |  | AggregateIntrinsicValue (in millions)
|Outstanding at fiscal year end 2007 |  | 1,551,249       |   |  | $                   | 6.77 $34.66 |                               | $ | 14.33                                              |  |                                       |  |   |    
|Exercised                           |  | (11,088         | ) |  |                     | 15.65 15.65 |                               |   | 15.65                                              |  |                                       |  |   |    
|Forfeited                           |  | (9,608          | ) |  |                     | 15.65 22.17 |                               |   | 17.52                                              |  |                                       |  |   |    
|                                    |  |                 |   |  |                     |              |                               |   |                                                    |  |                                       |  |   |    
|Outstanding at March 29, 2008       |  | 1,530,553       |   |  |                     | 6.77 34.66  |                               |   | 14.30                                              |  | 5.4                                   |  | $ | 6.7
|                                    |  |                 |   |  |                     |              |                               |   |                                                    |  |                                       |  |   |    
|Exercisable at March 29, 2008       |  | 1,008,393       |   |  |                     | 6.77 34.66  |                               |   | 11.64                                              |  | 4.4                                   |  | $ | 6.3



7



---

No stock options were granted by the Company in the first three months of fiscal 2008 or 2007. Additional
information pertaining to option activity during the first three months of fiscal 2008 and 2007 was as follows (in millions):



|                                           |  |                                   |     |      |   |    
|------------------------------------------ |  | --------------------------------- | --- | ---- | - | ---
|                                           |  | For the quarterended fiscal March
|                                           |  | 2008                              |     | 2007
|Weighted average grant-date fair value of: |  |                                   |     |      |   |    
|Stock options exercised                    |  | $                                 | 0.1 |      | $ | 0.3
|Stock options vested                       |  |                                   | 0.3 |      |   | 0.3

As of March 29, 2008, there was $4.6 million in stock option compensation expense related to
unvested awards not yet recognized, which is expected to be recognized over a weighted-average period of 1.4 years.

Restricted Stock

From time to time the Company grants shares of restricted stock to certain officers and directors. Certain restricted stock vests at
the five or seven year anniversary, with provisions for accelerated vesting upon the occurrence of certain pre-determined events (cliff-vesting shares), while other restricted stock vests equally over a five-year period or only upon the
occurrence of certain pre-determined events (the latter being referred to as performance shares). The fair value of all but the performance share grants is equal to the stock price on the date of the grant. The fair value of the
performance share grants was calculated using a Monte Carlo simulation model which uses multiple input variables. Activity for restricted shares for the first three months of fiscal 2008, including the non-vested restricted shares outstanding and
the weighted average grant-date fair value of those restricted shares is shown in the table below:



|                                           |  |                           |   |  |                                     |       |  
|------------------------------------------ |  | ------------------------- | - |  | ----------------------------------- | ----- | -
|                                           |  | Number ofRestrictedShares |   |  | WeightedAverageGrant-DateFair Value |      
|Non-vested balance as of December 29, 2007 |  | 570,045                   |   |  | $                                   | 15.75 |  
|Vested                                     |  | (50,000                   | ) |  |                                     | (6.77 | )
|                                           |  |                           |   |  |                                     |       |  
|Non-vested balance as of March 29, 2008    |  | 520,045                   |   |  | $                                   | 16.53 |  
|                                           |  |                           |   |  |                                     |       |  

The performance shares granted in 2007 vest only if the total return on the Companys stock
exceeds the total return on the S&P 500 stock index as of certain measurement dates. These conditionally vested grants were valued based on the probability of meeting the performance requirement. The derived service period for the conditionally
vested grants was calculated using a Monte Carlo simulation model which utilizes multiple input variables that determine the probability of satisfying each market condition stipulated in the award grant.

For cliff-vesting shares with a stipulated market condition granted in 2006, the derived service period was also calculated using a Monte Carlo
simulation model. Forfeiture assumptions were applied to all shares granted in 2007 and 2006.

As of March 29, 2008, there was $4.0
million of unamortized restricted stock compensation of which $8.6 million was included as a reduction to paid-in capital and $4.6 million was included in non-vested restricted stock subject to redemption. The $4.0 million of unamortized restricted
stock compensation is expected to be recognized over a weighted average period of 2.5 years.



8



---

Restricted stock grants include a change in control provision, which provides for cash
redemption of non-vested restricted stock in certain circumstances. Securities and Exchange Commission Accounting Series Release No. 268 (ASR 268), Presentation in Financial Statements of Redeemable Preferred Stocks, requires
securities with contingent cash settlement provisions which are not solely in the control of the issuer, without regard to probability of occurrence, to be classified outside of shareholders equity. While the Company believes the possibility
of occurrence of any such change of control event is remote, the contingent cash settlement of the restricted stock as a result of such event would not be solely in the control of the Company. As such, the Company presents the $4.6 million value of
non-vested restricted stock as temporary equity on the consolidated balance sheet. Upon the vesting of the restricted stock the Company reclassifies the value of the restricted stock to permanent equity.

Common Stock Warrants

On
March 27, 2003, the Company issued 1.0 million warrants valued at $5.0 million in connection with its 2003 debt restructuring. On January 5, 2004, 500,000 of these warrants were automatically cancelled because the Company met certain
financial objectives contained in the warrant agreements. As of March 29, 2008 a total of 52,593 warrants remained outstanding. The exercise price of the warrants is $0.01, and the warrants are exercisable at any time up to March 27, 2013.
Any warrants that remain unexercised at March 27, 2013 are automatically exercised as of that date.

8. Warranty

Customers are provided a written warranty from Midas on certain products purchased from Midas shops in North America, namely brake friction, mufflers,
shocks and struts. The warranty will be honored at any Midas shop in North America and is valid for the lifetime of the vehicle, but is voided if the vehicle is sold. The Company maintains a warranty accrual to cover the estimated future liability
associated with outstanding warranties. The Company determines the estimated value of outstanding warranty claims based on: 1) an estimate of the percentage of all warranted products sold and registered in prior periods at retail that are likely to
be redeemed; and 2) an estimate of the cost of redemption of each future warranty claim on a current cost basis. These estimates are computed using actual historical registration and redemption data as well as actual cost information on current
redemptions.

Year-to-date warranty activity through the first three months of fiscal 2008 is summarized as follows (in millions):



|                                                             |  |   |      |  
|------------------------------------------------------------ |  | - | ---- | -
|Accrued warranty at beginning of period                      |  | $ | 24.8 |  
|Warranty expense                                             |  |   | 0.1  |  
|Changes in foreign currency exchange rate                    |  |   | (0.2 | )
|Warranty credit issued to franchisees (warranty claims paid) |  |   | (1.1 | )
|                                                             |  |   |      |  
|Accrued warranty at end of period                            |  |   | 23.6 |  
|Less current portion                                         |  |   | (3.4 | )
|                                                             |  |   |      |  
|Accrued warranty  non-current                               |  | $ | 20.2 |  
|                                                             |  |   |      |  

As of January 1, 2008, the Company changed how the Midas warranty obligation is funded in the
United States. From June 2003 through December 2007, product royalties received from the Companys preferred supply chain vendors were recorded as revenue and substantially offset the cost of warranty claims. Beginning in fiscal 2008, the Midas
warranty program in the United States is funded directly by Midas franchisees. The franchisees are charged a fee for each warranted product sold to customers. The fee is charged when the warranty is registered with the Company. The fee billed to
dealers is deferred and will be recognized as revenue when the actual warranty is redeemed and included in warranty expense. This fee is intended to cover the Companys cost of the new warranty program, thus revenues under this program will
match expenses and the new warranty program will have no net impact on the results of operations. In connection with this change, beginning in 2008 Midas franchisees in the United States now receive rebates on their purchases from the Companys
preferred supply chain vendors and the Company no longer receives product royalties on Midas dealer purchases in the United States.

The
Midas warranty program in Canada did not change. The Company continues to receive royalties from certain preferred supply chain vendors based on dealer purchases in Canada and records a periodic warranty expense.



9



---

9. Acquisitions and Divestitures

During the first three months of fiscal 2008, the Company acquired four shops from Midas dealers to be run as company-operated shops, and acquired five shops which were immediately re-franchised to Midas dealers. Of
the shops acquired for the company-operated shop business, three were in Ottawa, Canada and the other was in New Jersey. The purchase price of the nine acquired shops was approximately $1.3 million, which consisted of $0.7 million paid in cash and
$0.6 million used to settle accounts receivable from the selling dealers. These acquisitions resulted in $0.8 million of incremental goodwill and other intangibles. The re-franchising of certain of these acquired shops generated $0.1 million in cash
and a loss on sale of assets of $0.3 million.

10. Derivative Instruments

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157), which defines fair value, establishes guidelines for measuring fair value and expands disclosures
regarding fair value measurements. SFAS 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in certain preceding accounting pronouncements. SFAS 157 is effective for fiscal years beginning
after November 15, 2007. However, in December 2007, the FASB issued FASB Staff Position SFAS 157-b (FSP 157-b), which delayed the effective date of SFAS 157 for all non-financial assets and non-financial liabilities, except
those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). FSP 157-b also deferred the effective date of SFAS 157 to fiscal years beginning after November 15, 2008, and interim
periods within those fiscal years for items within the scope of FSP 157-b. During the first quarter of 2008, the Company adopted SFAS 157, except as it applies to those non-financial assets and non-financial liabilities as noted in FSP 157-b.
Although the adoption of SFAS 157 did not materially impact its financial condition, results of operations, or cash flow, the Company is now required to provide additional disclosures as part of its financial statements.

SFAS 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined
as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no
market data exists, therefore requiring an entity to develop its own assumptions.

The Company has market risk exposure to changes in
interest rates, principally in the United States. Midas attempts to minimize this risk and fix a portion of its overall borrowing costs through the utilization of interest rate swaps. Midas hedges variable cash flows resulting from floating-rate
debt. Variable cash flows from outstanding debt are converted to fixed-rate cash flows by entering into receive-variable, pay-fixed interest-rate swaps. Hedge ineffectiveness is eliminated by matching all terms of the hedged item and the hedging
derivative at inception and on an ongoing basis. Midas does not exclude any terms from consideration when applying the matched terms method.

The fair values of the Companys interest rate swaps are estimated using Level 2 inputs, which are based on model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. The
Company also considers counterparty credit-risk and bilateral or own credit risk adjustments in estimating fair value, in accordance with the requirements of SFAS 157. The impact of adopting SFAS 157 resulted in a $55,000 decrease in
long-term swap liability, a $20,000 reduction in deferred income taxes and a $35,000 increase accumulated other comprehensive loss. The adoption of SFAS 157 had no impact on cash provided by operating activities.

The fair value of derivative instruments is summarized as follows (in millions):



|                                            |  |                        |  |                         |     |                        |                   |            |   |    
|------------------------------------------- |  | ---------------------- |  | ----------------------- | --- | ---------------------- | ----------------- | ---------- | - | ---
|                                            |  | As of March 29, 2008   |  | As of December 29, 2007
|                                            |  | Balance Sheet Location |  | Fair Value              |     | Balance Sheet Location |                   | Fair Value
|Derivatives designed as hedging instruments |  |                        |  |                         |     |                        |                   |            |   |    
|Interest rate contracts                     |  | Other liabilities      |  | $                       | 2.5 |                        | Other liabilities |            | $ | 1.2
|                                            |  |                        |  |                         |     |                        |                   |            |   |    
|Total                                       |  |                        |  | $                       | 2.5 |                        |                   |            | $ | 1.2
|                                            |  |                        |  |                         |     |                        |                   |            |   |    



10



---

Because the interest rate contracts have been designated as cash flow hedges and have been evaluated to
be highly effective, there is no impact on the Statement of Operations. The after-tax change in the fair value of these swaps is recorded in accumulated other comprehensive income as a gain or loss on derivative financial instruments.

11. Subsequent Event

On March 30, 2008, the Company
acquired the assets of G.C. & K.B. Investments, Inc. and its affiliated entities that franchise or sub-franchise 181 SpeeDee quick-lube and automotive maintenance shops. The purchase price was $20.8 million, which was financed through the
existing Midas credit facility.

SpeeDee is based in New Orleans and was founded in 1980. SpeeDee generated system-wide sales of
approximately $78 million in 2007 through its network of 116 U.S. shops, four of which were owned and operated by SpeeDee. A master franchisee manages the 19 shops in the Northeastern U.S. The SpeeDee system also includes 65 shops in Mexico that are
licensed to a master franchisee. The acquisition does not include any real estate.



11



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

RESULTS OF OPERATIONS

During fiscal 2003, Midas developed and began to implement a plan to
dramatically restructure the Companys operations and re-direct the Companys strategic focus towards the Midas retail system. This plan was intended to transform the Company by improving profitability, enhancing the competitive position
of the Midas retail system, strengthening the Companys balance sheet and reducing future capital requirements. A major component of this strategy was the elimination of unprofitable manufacturing and distribution operations. Midas concluded
these activities when it closed its last automotive exhaust distribution facility in Chicago in fiscal 2006 and liquidated all remaining assets related to its former exhaust manufacturing and distribution operation.

During fiscal 2006, the Company launched a major update to its retail shop image. The new image program incorporates changes to internal shop appearance
and merchandising, as well as a significant redesign of the Midas shop façade. Midas management believes the new image will better showcase the Companys expansion into new services, enhance efforts to educate customers and significantly
increase the visibility and curb appeal of the typical Midas shop. In order to encourage Midas dealers to adopt this new image, the Company offered to provide a subsidy of up to $2,600 per shop for those franchisees who agreed to adopt the program
prior to the end of fiscal 2007. Currently, over 1,000 U.S. locations have converted to the new image with an additional 200 to 300 shops committed to completing the conversion program in fiscal 2008. The subsidy offer has been extended through the
end of fiscal 2008 for franchisees in Canada. The Company recorded $0.2 million in business transformation costs during the first quarter of fiscal 2008 in connection this program. Midas believes the total cost of this program in fiscal 2008 will be
approximately $1.5 million.

Management is focused on building shareholder value through the profitable growth of the Company. In order to
achieve this goal, management is focused on four key initiatives:

Growth of the Midas System in North America

The first priority of Midas is building shareholder value through the profitable growth of the Midas retail system in North America, which includes both
comparable shop sales growth at existing Midas locations and growth in overall shop count. In support of this goal, in the first quarter of 2008, Midas launched its new branded brake service: Midas SecureStop. This is an attempt to differentiate the
Midas brake service based on the quality of parts used and services performed. In the recent past, price has been the primary point of differentiation for Midas and most competitors. The Company also has initiatives underway to substantially grow
its tire and maintenance revenue as a means of becoming a consumer destination for complete car care. In addition, Midas transitioned 38 shops to new ownership during the first quarter of fiscal 2008. Such transitions often lead to improved sales
performance and enhanced compliance with Midas franchise programs. While the retail auto service market in the U.S. continues to be negatively affected by weak consumer spending, Midas believes it is building the foundation for a return to positive
sales trends during fiscal 2008.

Global Expansion of the Midas Brand

Midas management believes that the Companys brand name and system management expertise can be leveraged to generate incremental royalty revenue through growth of the Midas system around the world. During the
first quarter of fiscal 2008, Midas licensed the development rights for Costa Rica. This was the first new international licensee for the Company since 2000. Midas continues to explore possible expansion opportunities into the high growth Asian
markets where currently it has no presence.

Acquisition of Complementary Franchising Operations

Midas management believes that the Company can add significant value for shareholders by acquiring complementary franchising operations. Midas management
possesses strong core competencies in both automotive aftermarket services and franchising. Furthermore, the Company believes it can successfully manage a substantial increase in shop count, whether through growth of the Midas retail system or
acquisition of another franchise operation, with limited incremental corporate overhead.

As of March 29, 2008, Midas had an
approximately $88 million net operating loss (NOL) carryforward. Midas believes it can create value for shareholders by successfully integrating accretive acquisitions that accelerate the utilization of the NOL.



12



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Given the above described factors, Midas has considered, and will continue to consider, potential
acquisition candidates.

On March 30, 2008, after the close of the fiscal first quarter, Midas acquired the assets of G.C. &
K.B. Investments, Inc. and its affiliated entities that franchise or sub-franchise 181 SpeeDee quick-lube and automotive maintenance shops. The purchase price was $20.8 million. This acquisition added 116 shop locations in the U.S. and 65 in Mexico.
The typical SpeeDee shop derives more than 50% of its sales from quick lube and fluid exchange services compared to only approximately 5% at Midas shops in the U.S. In addition, SpeeDee services cars much earlier in their lifecycle as approximately
34% of the vehicles serviced by SpeeDee are less than four years old compared to only 7% of the vehicles serviced at the typical Midas shop. The Company believes this strategic acquisition will enable Midas to accelerate growth of the Midas system
in North America through co-branding. The Company believes that by co-branding a retail outlet with both the SpeeDee and Midas brands, the Company will see customers much earlier in the lifecycle of their vehicle as SpeeDee oil change customers, and
will be able to convert these vehicles into Midas general repair customers as the vehicles age. The Company expects to test its first co-branded units in the second half of fiscal 2008.

Share Repurchases

The Company believes that returning capital to shareholders through share buybacks
enhances shareholder value. In November 2004, the Companys Board of Directors authorized a share repurchase of up to $25 million in Midas stock. In May 2006, the Board of Directors authorized a $25 million increase in the share repurchase
program, and in May 2007, the Board authorized an additional $50 million increase. Since the inception of this repurchase plan through December 29, 2007, the Company has repurchased approximately $65.4 million in stock, and $34.6 million
remains available under the Companys current authorization. Because of the recent acquisition on the SpeeDee business, no share repurchases were made during the first fiscal quarter of 2008. Midas expects to resume share repurchase activity in
the second half of 2008.

First Quarter Fiscal 2008 Compared with First Quarter Fiscal 2007

The following is a summary of the Companys sales and revenues for the first quarter of fiscal 2008 and 2007: ($ in millions)



|                                             |  |      |      |                 |       |   |      |   |                 |  |       |  
|-------------------------------------------- |  | ---- | ---- | --------------- | ----- | - | ---- | - | --------------- |  | ----- | -
|                                             |  | 2008 |      | Percentto Total |       |   | 2007 |   | Percentto Total | 
|Franchise royalties and license fees         |  | $    | 13.3 |                 | 29.7  | % |      | $ | 14.7            |  | 35.6  | %
|Real estate revenues from franchised shops   |  |      | 8.7  |                 | 19.4  |   |      |   | 9.0             |  | 21.8  |  
|Company-operated shop retail sales           |  |      | 14.9 |                 | 33.2  |   |      |   | 9.5             |  | 23.0  |  
|Replacement part sales and product royalties |  |      | 6.7  |                 | 15.0  |   |      |   | 7.0             |  | 16.9  |  
|Software sales and maintenance revenue       |  |      | 1.2  |                 | 2.7   |   |      |   | 1.1             |  | 2.7   |  
|                                             |  |      |      |                 |       |   |      |   |                 |  |       |  
|Total sales and revenues                     |  | $    | 44.8 |                 | 100.0 | % |      | $ | 41.3            |  | 100.0 | %
|                                             |  |      |      |                 |       |   |      |   |                 |  |       |  

Total sales and revenues for the first quarter of fiscal 2008 increased $3.5 million, or 8.5%,
from the first quarter of fiscal 2007 to $44.8 million. Within the retail auto service business, royalty revenues and license fees decreased $1.4 million, or 9.5%, from the first quarter of fiscal 2007. This decrease was primarily driven by a
scheduled reduction in the international royalties paid by Midas Europe and an increase in the number of company-operated shops whose royalties are eliminated. International royalties and license fees declined approximately $1.1 million during the
first quarter of fiscal 2008. Similar declines are expected throughout the year as the Midas Europe contract converted from a fixed $8.9 million annual royalty to a royalty based on 1% of Midas Europe retail sales at the beginning of fiscal 2008. A
1.6% decline in U.S. comparable shop sales was mostly offset by an increase of 7.8% in Canada and a favorable Canadian currency exchange rate. For the first quarter of fiscal 2008, comparable shop sales in North America declined approximately 0.9%.
Significant comparable shop sales growth in the new categories of tires of 16.6% and oil of 8.6% could not offset an 8.0% decline in brakes. In addition, sales weakness was very evident in the Southeast and West regions of the U.S., where comparable
shop sales declined 8.8% and 7.8%, respectively. The exhaust business benefited from the harsh winter conditions in the Northern U.S. and Canada, and thus was approximately flat to prior year in the quarter, which was much improved over the long
term trend and was the best quarterly performance in many years.

Revenues from real estate leases declined to $8.7 million as higher
revenues from scheduled rent increases and the favorable Canadian currency exchange rate were offset by a net reduction in the number of shops paying rent to Midas due to shop closures and the acquisition of company-operated shops, as well as lower
revenue from sales-based rental agreements.



13



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Sales from company-operated shops were $14.9 million in the first quarter of fiscal 2008 compared to $9.5
million in the first quarter of fiscal 2007. The increased revenues reflect additional company-operated shops as a result of acquisitions. The Company completed the first quarter of fiscal 2008 with 95 company-operated shops compared to 61 at the
close of the first quarter of fiscal 2007. Comparable shop sales for the company-operated shops were flat during the first quarter of fiscal 2008. The Chicago market grew comparable shop sales by more than 19%, but this strong performance was offset
by negative comparable shop sales of approximately 3.3% in the Florida, Colorado and Northeast company-operated shop markets.

Replacement
part sales and product royalties decreased 4.3% from $7.0 million to $6.7 million in the first quarter of fiscal 2008. The decrease in replacement part sales and product royalties was due to a change in the Midas warranty program in the U.S. As of
January 1, 2008, Midas no longer collects product royalties from U.S. supply chain partners. As a result of this program change, product royalty revenue declined approximately $0.9 million in the first quarter of fiscal 2008. This decline was
partially offset by a $0.6 million increase in sales of tires, batteries, oil and equipment to Midas dealers. Software sales and maintenance revenue increased $0.1 million to $1.2 million reflecting continued growth in the Companys RO Writer
software business.

Total operating costs and expenses increased $5.2 million, or 14.6%, in the first quarter of fiscal 2008 to $40.7
million as the higher number of company-operated shops caused a $5.7 million increase. Occupancy expenses for franchised shops increased $0.3 million, or 5.5%, reflecting scheduled increases in rent expense for shops leased by the Company, as well
as a net increase in the number of leased shops. Company-operated shop costs and expenses rose to $15.0 million from $9.3 million mostly as a result of additional shops and the incremental overhead required to support them compared to the same
period one year ago. Payroll and employee benefit costs increased slightly to 41.6% of company-operated shop sales in the first quarter of fiscal 2008 compared to 41.1% in the prior year. Company-operated shop occupancy and other expenses increased
as a percentage of sales from 32.6% in the first quarter of fiscal 2007 to 33.6% in the first quarter of fiscal 2008. Company-operated shop cost of sales increased from 24.2% in the first quarter of fiscal 2007 to 25.5% in the first quarter of
fiscal 2008, primarily as a result of an increase in sales of tires, which generally have a lower margin.

Replacement part cost of sales
increased $0.6 million to 91.0% of replacement part sales and product royalties from 78.5% in the first quarter of fiscal 2007. The increased cost of replacement part sales relative to revenue was due to the change in the U.S. warranty program
beginning in fiscal 2008 in which Midas no longer collects product royalty revenue from U.S supply chain partners (such product royalties had no offsetting cost of sales). Warranty expense in the first quarter of fiscal 2008 was an expense of $0.1
million compared to an expense of $1.1 million in first quarter of fiscal 2007. The approximately $1.0 million reduction in warranty expense was due to the change in the U.S. warranty program. Under the new arrangement, expenses for U.S. warranty
redemptions will be expensed as incurred. However, because Midas U.S. supply chain partners are responsible for the warranty of parts during the first 12 months, Midas will not begin to incur expenses under the new program until fiscal 2009.

Selling, general and administrative expenses in the first quarter of fiscal 2008 decreased $0.4 million, or 2.9%, from the first quarter
of fiscal 2007 to $13.2 million. The Company spent an incremental $0.4 million related to its efforts to accelerate the transition of shops to new owners because of the long-term benefits that these transitions bring. This increased spending was
completely offset by the Companys ongoing expense reduction program, which included lower costs for rent in the Midas corporate office as a result of a new lease arrangement.

During the first quarter of fiscal 2008, the Company recorded business transformation charges of $0.2 million in connection with the Companys
partial funding of the rollout of a new shop image for Midas dealers. During the first quarter of fiscal 2007, the Company recorded business transformation charges of $0.5 million. The fiscal 2007 charges reflected $0.3 million related to the early
termination of the Companys supply agreement with AutoZone, $0.4 million in connection with the Companys new shop image program and a credit of $0.2 million to reflect an adjustment to the reserve for non-recoverable lease costs
pertaining to the closure of six company-operated shops in late 2006.

During the first quarter of fiscal 2008, the Company recorded a loss
on sale of $0.3 million in connection with the sale of certain shop assets. No loss on sale of assets was recorded in the first quarter of fiscal 2007.

As a result of the above changes, operating income decreased $1.7 million to $4.1 million in the first quarter of fiscal 2008 from $5.8 million in the first quarter of fiscal 2007. Excluding the impact of the above
described business transformation charges and loss on sale, operating income for the first quarter of fiscal 2008 was $4.6 million compared to $6.3 million for the first quarter of fiscal 2007. Excluding the impact of business transformation charges
and loss on sale, operating income margin decreased to 10.3% of sales in the first quarter of fiscal 2008 from 15.3% in the first quarter of fiscal 2007. The reduction in operating income margin reflects lower royalties and license fees due to the
reduced Midas Europe royalty and an increase in revenues from company-operated shops with lower operating profitability. These negative factors could not be offset by lower corporate overhead. The Company is currently in the process of
re-franchising certain company-operated shops and expects overall margins to improve as the size of the company-operated shop portfolio is reduced.



14



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Interest expense was $2.2 million in the first quarter of fiscal 2008 compared to $2.2 million in the
first quarter of fiscal 2007. Interest expense was flat to prior year despite higher average bank debt compared to the year ago period primarily due to the reduction in interest rates.

Other income increased from $0.1 million in the first quarter of fiscal 2007 to $0.2 million in the first quarter of fiscal 2008 primarily due to
currency exchange related gains. Other income consists primarily of interest income on overdue customer accounts and foreign currency exchange gains or losses.

The Companys effective tax rate was 40.0% in the first quarter of fiscal 2008 compared to 41.1% in the first quarter of fiscal 2007 and compared to the 2008 statutory tax rate of 39.0%. The fiscal 2008 variance
from the statutory rate is primarily due to the impact of non-deductible executive compensation and other non-deductible expenses. The tax rate improved over the prior year primarily due to a lower corporate income tax rate in Canada.

As a result of the above items, net income decreased $0.9 million from net income of $2.2 million in the first quarter of fiscal 2007 to net income of
$1.3 million in the first quarter of fiscal 2008.

LIQUIDITY AND CAPITAL RESOURCES

Following is a summary of the Companys cash flows from operating, investing and financing activities for the first three months of fiscal 2008 and
2007, respectively (in millions):



|                                                                                                                                      |  |      |      |   |      |   |      |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | ---- | -
|                                                                                                                                      |  | 2008 |      |   | 2007 |  
|Cash provided by operating activities before cash outlays for business transformation costs and net changes in assets and
liabilities |  | $    | 6.5  |   |      | $ | 7.8  |  
|Cash outlays for business transformation costs                                                                                        |  |      | (0.2 | ) |      |   | (1.5 | )
|Net changes in assets and liabilities                                                                                                 |  |      | 0.6  |   |      |   | (3.0 | )
|                                                                                                                                      |  |      |      |   |      |   |      |  
|Net cash provided by operating activities                                                                                             |  |      | 6.9  |   |      |   | 3.3  |  
|Net cash used in investing activities                                                                                                 |  |      | (2.5 | ) |      |   |     |  
|Net cash used in financing activities                                                                                                 |  |      | (3.5 | ) |      |   | (4.1 | )
|                                                                                                                                      |  |      |      |   |      |   |      |  
|Net change in cash and cash equivalents                                                                                               |  | $    | 0.9  |   |      | $ | (0.8 | )
|                                                                                                                                      |  |      |      |   |      |   |      |  

The Companys cash management system permits the Company to make daily borrowings and
repayments on its revolving line of credit, allowing Midas to minimize interest expense and to maintain a low cash balance. Midas cash and cash equivalents increased $0.9 million in the first three months of fiscal 2008.

The Companys operating activities provided net cash of $6.9 million during the first three months of fiscal 2008 compared to $3.3 million in the
first three months of fiscal 2007. Excluding cash outlays for business transformation costs and changes in assets and liabilities, cash from operating activities decreased from $7.8 million in the first three months of fiscal 2007 to $6.5 million in
the first three months of fiscal 2008, as the decrease in net income, lower utilization of deferred tax assets, reduced business transformation charges and decline in stock-based compensation was partially offset by the $0.3 million loss on sale of
assets and higher depreciation and amortization. Cash outlays for business transformation costs declined from $1.5 million in the first three months of fiscal 2007 to $0.2 million in the first three months of fiscal 2008. Cash outlays for business
transformation costs in the first three months of fiscal 2008 were related to the Companys update of its retail shop image while cash outlays in the first three months of fiscal 2007 were related to the early termination of the supply
agreement with AutoZone and the Companys update of its retail shop image.

Changes in assets and liabilities swung from a $3.0
million use of cash in the first three months of fiscal 2007 to a $0.6 million source of cash in the first three months of fiscal 2008. The $0.6 million source of cash in 2008 was primarily due to a decline in receivables due to improved
collections, while the $3.0 million use of cash in 2007 was primarily due to the timing of payments to vendors.

Investing activities used
$2.5 million of cash in the first three months of fiscal 2008 and had no impact on cash flow in the first three months of fiscal 2007. Fiscal 2008 investing activities primarily consisted of $1.9 million in capital expenditures, $0.7 million paid in
conjunction with the acquisition of nine shops and other assets from certain Midas dealers, and $0.1 million in cash generated as the result of the sale of five shops to Midas franchisees. The $1.9 million in capital expenditures included $0.4
million in office



15



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renovation costs, $0.8 million for real estate purchases, $0.2 million for systems development projects and $0.5 million for company-operated shop equipment
additions and other capital expenditures. Fiscal 2007 investing activities primarily consisted of $0.4 million in systems development projects, company-operated shop equipment additions and other capital expenditures, $0.3 million paid in
conjunction with the acquisition of two Midas shops and other assets from certain Midas dealers and $0.7 million in cash generated as the result of the sale of seven company-operated shops.

Net cash used in financing activities was $3.5 million in the first three months of fiscal 2008, compared to net cash used of $4.1 million in the first
three months of fiscal 2007. During fiscal 2008, the Company decreased total debt by $4.1 million, increased outstanding checks by $0.5 million and received $0.1 million in cash from the exercise of outstanding stock options. During fiscal 2007, the
Company increased total debt by $5.4 million, decreased outstanding checks by $3.5 million, paid $7.0 million to repurchase shares of the Companys common stock and received $1.0 million in cash from the exercise of outstanding stock options.

On October 27, 2005, the Company entered into a five-year, unsecured $110 million revolving credit facility. On February 4,
2008, the Company amended the loan by increasing the revolving credit facility to $130 million. The amended facility is further expandable to $165 million at the Companys discretion with lender approval. The interest rate floats based on the
underlying rate of LIBOR and the Companys leverage. This facility requires maintenance of certain financial covenants including maximum allowable leverage and minimum tangible net worth. As of March 29, 2008, the interest rate on the
Companys revolving loan borrowings was priced at LIBOR plus 1.25%.

As of March 29, 2008, a total of $72.6 million was
outstanding under the revolving credit facility. As of December 29, 2007, a total of $76.3 million was outstanding under the revolving credit facility.

In November 2005, $20 million in senior bank debt was converted from floating rate to fixed rate by locking-in LIBOR at 4.89% for a five year period. In addition, in March 2007, the Company entered into an interest
rate swap arrangement to convert an additional $25 million in senior bank debt from floating rate to a fixed rate by locking-in LIBOR at 4.91% for the remaining term of the Companys bank agreement (October 2010). This swap effectively replaced
a declining balance swap that expired in March 2007 under which LIBOR was locked-in at 2.76% for a three-year term. As a consequence, currently $45 million of the Companys $72.6 million in senior bank debt is at fixed rates.

Both the November 2005 and March 2007 swap arrangements have been designated as cash flow hedges and have been evaluated to be highly effective. As a
result, the after-tax change in the fair value of these swaps is recorded in accumulated other comprehensive income as a gain or loss on derivative financial instruments.

On November 9, 2004, the Midas Board of Directors authorized a share repurchase program to begin in fiscal 2005 for up to $25 million of the Companys outstanding common stock. On May 9, 2006, the Midas
Board of Directors authorized a $25 million increase in the share repurchase program and on May 8, 2007 the Board authorized an additional $50 million increase. The Company intends to repurchase shares from time to time in the open market and
in privately negotiated transactions, depending upon market and business conditions. The Company has paid approximately $65.4 million for shares acquired under this current program since the buyback program was first authorized in 2004.

The Company believes that cash generated from operations and availability under the current debt agreement provides sufficient liquidity to finance
operations and execute strategic initiatives for at least the next 12 months.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management
must make a variety of decisions which impact the reported amounts and related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied, the assumptions on which to base accounting estimates, and the
consistent application of those accounting principles. Due to the type of industry in which the Company operates, the nature of its business, and the Companys existing business transformation process, the following accounting policies are
those that management believes are most important to the portrayal of the Companys financial condition and results and that require managements most difficult, subjective or complex judgments, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain.



16



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Valuation of Warranty Liabilities

Customers are provided a written warranty from Midas on certain Midas products purchased from Midas shops in North America, namely brake friction,
mufflers, shocks and struts. The warranty will be honored at any Midas shop in North America and is valid for the lifetime of the vehicle, but is voided if the vehicle is sold. The Company maintains a warranty accrual to cover the estimated future
liability associated with outstanding warranties. The Company determines the estimated value of outstanding warranty claims based on: 1) an estimate of the percentage of all warranted products sold and registered in prior periods at retail that are
likely to be redeemed; and 2) an estimate of the cost of redemption of each future warranty claim on a current cost basis. These estimates are computed using actual historical registration and redemption data as well as actual cost information on
current redemptions. A decrease of one percentage point in the estimated percentage of warranted products likely to be redeemed in the U.S. would have the effect of changing Midas December 29, 2007 outstanding U.S. warranty liability by
approximately $3.9 million. A change in the estimated current cost of warranty redemptions of one dollar would have the effect of changing Midas outstanding U.S. warranty liability by approximately $1.1 million.

As of January 1, 2008, the Company changed how the Midas warranty obligation is funded in the United States. From June 2003 through December 2007,
product royalties received from the Companys preferred supply chain vendors were recorded as revenue and substantially offset the cost of warranty claims. Beginning in fiscal 2008, the Midas warranty program in the United States is funded
directly by Midas franchisees. The franchisees are charged a fee for each warranted product sold to customers. The fee is charged when the warranty is registered with the Company. The fee billed to dealers is deferred and will be recognized as
revenue when the actual warranty is redeemed and included in warranty expense. This fee is intended to cover the Companys cost of the new warranty program, thus revenues under this program will match expenses and the new warranty program will
have no profit or loss impact. In connection with this change, beginning in 2008 Midas franchisees in the United States will receive rebates on their purchases from the Companys preferred supply chain vendors and the Company will no longer
receive product royalties on Midas dealer purchases in the United States.

The Midas warranty program in Canada did not change. The Company
continues to receive royalties from certain preferred supply chain vendors based on dealer purchases in Canada and records a periodic warranty expense.

Valuation of Receivables

The Company records receivables due from its franchisees and other
customers at the time the sale is recorded in accordance with its revenue recognition policies. These receivables consist of amounts due from the sale of products, royalties due from franchisees and suppliers, rents and other amounts. The future
collectibility of these amounts can be impacted by the Companys collection efforts, the financial stability of its customers, and the general economic climate in which it operates. The Company applies a consistent practice of establishing an
allowance for accounts that it feels may become uncollectible through reviewing the historical aging of its receivables and by monitoring the financial strength of its franchisees and other customers. Where the Company becomes aware of a
customers inability to meet its financial obligations (e.g. where it is in financial distress or has filed for bankruptcy), the Company specifically reserves for the potential bad debt to reduce the net recognized receivable to the amount it
reasonably believes will be collected. The valuation of receivables is performed on a quarterly basis.

Pensions

The Company has non-contributory defined benefit pension plans covering certain of its employees. The Companys funding policy for the U.S. plan
is to contribute amounts sufficient to meet the minimum funding requirement of the Employee Retirement Income Act of 1974, plus any additional amounts the Company may deem to be appropriate. The Company accounts for its defined benefit pension plans
in accordance with Statement of Financial Accounting Standards (SFAS) No. 87, Employers Accounting for Pensions, and SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement
Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R), which require that amounts recognized in the financial statements be determined on an actuarial basis. Under SFAS No. 158, the amount recorded as pension assets
or liabilities is determined by comparing the projected benefit obligation (PBO) to the fair value of the plan assets. Amounts recognized in accumulated other comprehensive loss consist of unrecognized actuarial gains, losses, and prior service
costs, net of tax.

To account for its defined benefit pension plans in accordance with SFAS No. 87, the Company must make three main
determinations at the end of each fiscal year: First, it must determine the actuarial assumption for the discount rate used to reflect the time value of money in the calculation of the projected benefit obligation for the end of the current fiscal
year and to determine the net periodic pension cost for the subsequent year. For guidance in determining this rate, the Company looks at rates of return on high-quality fixed-income investments and periodic published rate ranges.



17



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Second, the Company must determine the actuarial assumption for rates of increase in compensation levels
used in the calculation of the accumulated and projected benefit obligations for the end of the current fiscal year and to determine the net periodic pension cost for the subsequent year. In determining these rates the Company looks at its
historical and expected rates of annual salary increases

Third, the Company must determine the expected long-term rate of return on assets
assumption that is used to determine the expected return on plan assets component of the net periodic pension cost for the subsequent year. The difference between the actual return on plan assets and the expected return is deferred under SFAS
No. 87 and is recognized in net periodic pension cost over a five-year period.

Carrying Values of Goodwill and Long-Lived
Assets

In accordance with SFAS No. 142, the Company conducts tests for impairment of goodwill annually in the fiscal fourth
quarter or more frequently if circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that an assets carrying amount exceeds its fair value.

Midas evaluates the carrying values of its long-lived assets to be held and used in the business by reviewing undiscounted cash flows by asset group.
Such evaluations are performed whenever events and circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the projected undiscounted cash flows over the remaining lives of the related assets does not exceed
the carrying values of the assets, the carrying values are adjusted for the differences between the fair values and the carrying values. Additionally, in the case of fixed assets related to locations that will be closed or sold, the Company writes
down fixed assets to their estimated recovery value.

Deferred Income Taxes

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the
deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences at March 29, 2008. In the event that management determines the Company would not be
able to realize all or part of the net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made.

IMPACT OF NEW ACCOUNTING STANDARDS

In September 2006, the FASB issued Statement of Financial
Accounting Standard (SFAS) No. 157, Fair Value Measurements, (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair
value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements. SFAS 157 became effective for Midas on December 30, 2007 (the beginning of fiscal 2008). The only
applicability of this standard for the Company was related to its existing interest rate swaps. The Company adopted this provision by recording a $55,000 decrease in long-term swap liability, a $20,000 reduction in deferred income taxes and a
$35,000 increase accumulated other comprehensive loss. The adoption of SFAS 157 had no impact on cash provided by operating activities.

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R), (SFAS 158). The Company
adopted SFAS 158 on December 30, 2006, which resulted in a $7.0 million reduction in other assets, a $2.8 million increase in deferred tax assets, a $0.2 million increase in other liabilities and a $4.4 million increase in accumulated other
comprehensive loss. The adoption had no impact on the Companys results of operations or cash flows.

SFAS 158 also requires an
employer to measure plan assets and benefit obligations as of the balance sheet date effective for periods ending after December 15, 2008. On December 30, 2007 the Company adopted this provision by recording adjustments to opening balances
which resulted in a $110,000 increase in other assets, a $40,000 reduction in deferred income taxes, a $50,000 increase in retained earnings and a $20,000 reduction in accumulated other comprehensive loss. The adoption of SFAS 158 had no impact on
cash provided by operating activities.



18



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In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 permits a company to choose to measure certain financial assets and liabilities at fair value that are not currently required to be
measured at fair value (i.e. the Fair Value Option). Election of the Fair Value Option is made on an instrument-by-instrument basis and is irrevocable. At the adoption date, unrealized gains and losses on financial assets and liabilities for which
the Fair Value Option has been elected would be reported as a cumulative adjustment to beginning retained earnings. The adoption of SFAS 159 had no impact on the Company as the Company elected to not measure any of the assets or liabilities subject
to this pronouncement at fair value.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activitiesan amendment of FASB Statement No. 133, (SFAS 161). SFAS 161 requires enhanced disclosures about an entitys derivative and hedging activities, including (i) how and why an entity uses derivative
instruments, (ii) how derivative instruments and related hedged items are accounted for under SFAS 133, and (iii) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and
cash flows. This standard becomes effective for Midas on January 4, 2009. Midas adopted SFAS 161 effective December 30, 2007. As SFAS 161 only requires enhanced disclosures, this standard will have no impact on the consolidated financial
statements.

FORWARD LOOKING STATEMENTS

This report contains (and oral communications made by Midas may contain) forward-looking statements that may be identified by their use of words like plans, expects, anticipates, intends,
estimates, forecasts, will, outlook or other words of similar meaning. All statements that address Midas expectations or projections about the future, including statements about Midas
strategy for growth, cost reduction goals, expenditures and financial results, are forward-looking statements. Forward-looking statements are based on Midas estimates, assumptions and expectations of future events and are subject to a number
of risks and uncertainties. All such statements are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Midas cannot guarantee that these estimates, assumptions and expectations are accurate or
will be realized. Midas disclaims any intention or obligation (other than as required by law) to update or revise any forward-looking statements.

The Companys results of operations and the forward-looking statements could be affected by, among others things: general economic conditions in the markets in which the Company operates; economic developments that have a particularly
adverse effect on one or more of the markets served by the Company; the ability to execute managements internal operating plans; the timing and magnitude of capital expenditures; the Companys ability to access debt and equity markets;
economic and market conditions in the U.S. and worldwide; currency exchange rates; changes in consumer spending levels and demand for new products and services; and overall competitive activities. Certain of these risks are more fully described in
Item 1 of Part I of the Companys annual report on Form 10-K. 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.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

The Company is subject to certain market risks, including foreign currency and interest rates. The Company uses a variety of practices to manage these market risks, including, when considered appropriate, derivative financial instruments.
The Company uses derivative financial instruments only for risk management and does not use them for trading or speculative purposes. The Company is exposed to potential gains or losses from foreign currency fluctuations affecting net investments
and earnings denominated in foreign currencies. Historically, the Companys primary exposure is to changes in exchange rates for the U.S. dollar versus the Canadian dollar. Beginning in fiscal 2008, the Company also has exposure to changes in
exchange rates between the U.S. dollar and the Euro for international license fees from Europe that were previously fixed and denominated in U.S. dollars.

Interest rate risk is managed through variable rate borrowings in combination with swaps to fixed interest rates on a portion of those borrowings. The Company is exposed to credit risk on certain assets, primarily
accounts receivable. The Company provides credit to customers in the ordinary course of business and performs ongoing credit evaluations. Concentrations of credit risk with respect to trade receivables are limited due to the large number of
customers comprising the Companys customer base. The Company believes its allowance for doubtful accounts is sufficient to cover customer credit risk.



19



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The Company is exposed to credit risk on certain assets, primarily accounts receivable. The Company
provides credit to customers in the ordinary course of business and performs ongoing credit evaluations. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers comprising the Companys
customer base. The Company believes its allowance for doubtful accounts is sufficient to cover customer credit risk.

In November 2005, $20
million in senior bank debt was converted from floating rate to fixed rate by locking-in LIBOR at 4.89% for a five year period. In addition, in March 2007, the Company entered into an interest rate swap arrangement to convert $25 million in senior
bank debt from floating rate to a fixed rate by locking-in LIBOR at 4.91% for the remaining term of the Companys bank agreement (October 2010). This swap effectively replaced a declining balance swap that expired in March 2007 under which
LIBOR was locked-in at 2.76% for a three-year term. As a consequence, currently $45 million of the Companys $72.6 million in senior bank debt is at fixed rates.

Both the November 2005 and March 2007 swap arrangements have been designated as cash flow hedges and have been evaluated to be highly effective. As a result, the after-tax change in the fair value of these swaps is
recorded in accumulated other comprehensive income as a gain or loss on derivative financial instruments. As of March 29, 2008, the fair value of these instruments was a pre-tax loss of approximately $2.5 million.



|Item 4. | Controls and Procedures.
|------- | ------------------------

(a) Evaluation of disclosure controls and
procedures.

The Companys management, with the participation of the Companys Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of
the end of the period covered by this report. Based on such evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Companys disclosure controls and procedures
were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

The Companys management, including the Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and
procedures and its internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control
system are met.



|(b) | Changes in internal controls over financial reporting.
|--- | ------------------------------------------------------

There were no changes in internal controls during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial reporting.



20



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

None



|Item 1A. | Risk Factors.
|-------- | -------------

There have been no material changes from
the risk factors previously disclosed in the Companys most recent annual report on Form 10-K.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------

The following table includes all issuer repurchases, including those made pursuant to publicly announced plans or programs and those not made pursuant to publicly announced plans or programs.



|                                                           |  |                                |  |                            |  |                                                                             |  |                                                                                         |           
|---------------------------------------------------------- |  | ------------------------------ |  | -------------------------- |  | --------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------- | ----------
|Period                                                     |  | Total Number ofSharesPurchased |  | AveragePrice Paidper Share |  | Total Number ofShares Purchasedas Part ofPubliclyAnnounced Plansor Programs |  | Approximate DollarValue of SharesThat May Yet BePurchased Underthe Plans orPrograms
(1)
|January 2008:(December 30, 2007 through January 26, 2008)  |  |                               |  |                           |  |                                                                            |  | $                                                                                       | 34,620,992
|February 2008:(January 27, 2008 through February 23, 2008) |  |                               |  |                           |  |                                                                            |  | $                                                                                       | 34,620,992
|March 2008:(February 24, 2008 through March 29, 2008)      |  |                               |  |                           |  |                                                                            |  | $                                                                                       | 34,620,992
|                                                           |  |                                |  |                            |  |                                                                             |  |                                                                                         |           
|Total                                                      |  |                               |  |                           |  |                                                                            |  |                                                                                         |           
|                                                           |  |                                |  |                            |  |                                                                             |  |                                                                                         |           



|(1) | On November 9, 2004, the Company announced that the Board of Directors had authorized a share repurchase of up to $25 million in Midas stock. On May 9, 2006, the Midas
Board of Directors authorized a $25 million increase in the share repurchase program, and on May 8, 2007, the Board authorized an additional $50 million increase. As of March 29, 2008, a total of approximately 3,229,000 shares had been
repurchased under this authorization plan since its inception. The average price of shares repurchased under the plan was approximately $20.25.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

None



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

None



|Item 5. | Other Information.
|------- | ------------------

None



|Item 6. | Exhibits.
|------- | ---------



|10.1 | Agreement dated March 30, 2008 regarding Midas acquisition of G.C. & K.B. Investments, Inc.
|---- | --------------------------------------------------------------------------------------------



21



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|31.1 | Rule 13a  14(a) / 15d  14(a) Certification of Chief Executive Officer.
|---- | ------------------------------------------------------------------------



|31.2 | Rule 13a  14(a) / 15d  14(a) Certification of Chief Financial Officer.
|---- | ------------------------------------------------------------------------



|32.1 | Section 1350 Certifications.
|---- | ----------------------------

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                  |  |  |  |                                                     
|----------------- |  |  |  | ----------------------------------------------------
|Date: May 8, 2008 |  |  |  | /s/ Alan D. Feldman                                 
|                  |  |  |  | Alan D. Feldman                                     
|                  |  |  |  | Chairman, President and Chief Executive Officer     
|                  |  | 
|                  |  |  |  | /s/ William M. Guzik                                
|                  |  |  |  | William M. Guzik                                    
|                  |  |  |  | Executive Vice President and Chief Financial Officer
|                  |  | 
|                  |  |  |  | /s/ James M. Haeger, Jr.                            
|                  |  |  |  | James M. Haeger, Jr.                                
|                  |  |  |  | Vice President and Controller                       



22