<PAGE>

                       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, 2003

                                       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)

<TABLE>
<S>                                                                     <C>
                           Delaware                                                  36-4180556
(State or Other Jurisdiction of Incorporation or Organization)          (I.R.S. Employer Identification No.)

          1300 Arlington Heights Road, Itasca, Illinos                                   60143
            (Address of Principal Executive Offices)                                  (Zip Code)
</TABLE>

                                 (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 an accelerated filer (as
defined in Rule 12b-2). Yes X No

      The number of shares of the Registrant's Common Stock, $.001 par value per
share, outstanding as of May 12, 2003 was 15,040,374.

<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1:  Financial Statements

                                   MIDAS, INC.
                 CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
                  (In millions, except for earnings per share)

<TABLE>
<CAPTION>
                                                                                             For the quarter
                                                                                           ended fiscal March
                                                                                           ------------------
                                                                                         2003               2002
                                                                                         ----               ----
                                                                                      (13 Weeks)         (13 Weeks)
<S>                                                                                   <C>               <C>
Sales and revenues .................................................................  $   74.5          $   81.4
Cost of sales and revenues .........................................................      38.7              40.9
                                                                                      --------          --------
      Gross profit .................................................................      35.8              40.5

Selling, general, and distribution expenses ........................................      37.3              35.1
Business transformation charges ....................................................       5.1                --
                                                                                      --------          --------
      Operating income (loss) ......................................................      (6.6)              5.4

Interest expense ...................................................................      (4.3)             (2.6)
Other income, net ..................................................................       0.4                --
                                                                                      --------          --------
      Income (loss) before income taxes (benefit) ..................................     (10.5)              2.8
Income taxes (benefit) .............................................................      (4.1)              1.1
                                                                                      --------          --------
      Net income (loss) ............................................................  $   (6.4)         $    1.7
                                                                                      ========          ========

Earnings (loss) per share:
  Basic ............................................................................  $  (0.43)         $   0.12
                                                                                      ========          ========
  Diluted ..........................................................................  $  (0.43)         $   0.12
                                                                                      ========          ========

Average number of shares
  Common shares outstanding ........................................................      15.0              15.0
  Equivalent shares on outstanding stock options ...................................        --                --
                                                                                      --------          --------
  Shares applicable to diluted earnings ............................................      15.0              15.0
                                                                                      ========          ========
</TABLE>

                  See notes to condensed financial statements.

                                       1

<PAGE>

                                   MIDAS, INC.
                            CONDENSED BALANCE SHEETS
                                  (In millions)

<TABLE>
<CAPTION>
                                                                                     Fiscal          Fiscal
                                                                                      March         December
                                                                                      2003            2002
                                                                                      ----            ----
                                                                                    (Unaudited)
<S>                                                                               <C>               <C>
Assets:
Current assets:
   Cash and cash equivalents ...................................................  $    2.2           $    0.5
   Receivables, net ............................................................      57.3               50.7
   Inventories, net ............................................................      85.0               94.6
   Other current assets ........................................................      50.8               50.6
                                                                                  --------           --------
     Total current assets ......................................................     195.3              196.4
Property and equipment, net ....................................................     149.9              155.1
Intangible assets ..............................................................      12.3               12.3
Other assets ...................................................................      13.6                6.7
                                                                                  --------           --------
      Total assets .............................................................  $  371.1           $  370.5
                                                                                  ========           ========

Liabilities and Equity:
Current liabilities:
   Current portion of long-term obligations ....................................  $    1.7           $    1.6
   Accounts payable ............................................................      23.5               26.5
   Accrued expenses ............................................................      34.3               29.6
                                                                                  --------           --------
     Total current liabilities .................................................      59.5               57.7
Long-term debt .................................................................     132.1              132.8
Obligations under capital leases ...............................................       7.1                7.4
Finance lease obligation .......................................................      38.2               38.3
Deferred income taxes and other liabilities ....................................      29.7               29.7
                                                                                  --------           --------
     Total liabilities .........................................................     266.6              265.9
                                                                                  --------           --------
Shareholders' equity:
  Common stock ($.001 par value, 100 million shares authorized;
    17.3 million shares issued) and paid-in capital ............................      24.4               21.9
  Treasury stock, at cost (2.2 million shares and 2.3 million shares) ..........     (50.7)             (53.7)
  Unamortized restricted stock awards ..........................................      (1.2)              (1.0)
  Retained income ..............................................................     144.6              151.0
  Cumulative other comprehensive loss ..........................................     (12.6)             (13.6)
                                                                                  --------           --------
    Total shareholders' equity .................................................     104.5              104.6
                                                                                  --------           --------
      Total liabilities and equity .............................................  $  371.1           $  370.5
                                                                                  ========           ========
</TABLE>

                  See notes to condensed financial statements.

                                       2

<PAGE>

                                   MIDAS, INC.
                 CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
                                  (In millions)

<TABLE>
<CAPTION>
                                                                                      For the quarter
                                                                                    ended fiscal March
                                                                                    ------------------
                                                                                  2003              2002
                                                                                  ----              ----
<S>                                                                             <C>               <C>
Cash flows from operating activities:
Net income (loss) ............................................................  $ (6.4)           $  1.7
Adjustments reconciling net income (loss) to net cash
  used in operating activities:
     Depreciation and amortization ...........................................     4.7               4.2
     Business transformation charges .........................................     5.1                --
     Cash outlays for business transformation costs ..........................    (3.5)             (0.5)
     Changes in assets and liabilities, exclusive of effects of business
          transformation charges, acquisitions and dispositions ..............    (4.5)             (7.5)
                                                                                ------            ------
Net cash used in operating activities ........................................    (4.6)             (2.1)
                                                                                ------            ------

Cash flows from investing activities:
Capital investments ..........................................................    (1.0)             (4.4)
Cash paid for acquired businesses ............................................    (0.4)             (0.4)
Proceeds from sales of assets ................................................     3.7                --
                                                                                ------            ------
Net cash provided by (used in) investing activities ..........................     2.3              (4.8)
                                                                                ------            ------

Cash flows from financing activities:
Net decrease in short-term debt ..............................................      --              (0.1)
Net increase (decrease) in long-term debt ....................................    (0.6)              7.9
Payment of obligations under capital leases ..................................    (0.2)             (0.2)
Net decrease in finance lease obligation .....................................    (0.2)               --
Issuance of stock warrants ...................................................     5.0                --
Cash paid for treasury shares ................................................      --              (0.2)
                                                                                ------            ------
Net cash provided by financing activities ....................................     4.0               7.4
                                                                                ------            ------

Net change in cash and cash equivalents ......................................     1.7               0.5
Cash and cash equivalents at beginning of period .............................     0.5               1.5
                                                                                ------            ------
Cash and cash equivalents at end of period ...................................  $  2.2            $  2.0
                                                                                ======            ======
</TABLE>

                  See notes to condensed financial statements.

                                       3

<PAGE>

                                   MIDAS, INC.
       CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
                                  (In millions)

<TABLE>
<CAPTION>
                                               Common Stock
                                                    And                              Unamortized                   Comprehensive
                                              Paid-in Capital     Treasury Stock      Restricted    Retained       Income (Loss)
                                              ---------------     --------------                                   -------------
                                              Shares    Amount   Shares     Amount   Stock Awards   Earnings    Current  Cumulative
                                              ------    ------   ------     ------   ------------   --------    -------  ----------
<S>                                           <C>      <C>       <C>       <C>       <C>            <C>         <C>      <C>
Fiscal year end 2002 .......................    17.3   $  21.9     (2.3)   $ (53.7)     $ (1.0)     $  151.0              $ (13.6)

Purchase of treasury shares ................      --        --       --       (0.1)         --            --                   --

Restricted stock awards ....................      --      (2.5)     0.1        3.5        (1.0)           --                   --

Vesting of restricted stock awards .........      --        --       --         --         0.3            --                   --

Forfeiture of restricted stock
  awards ...................................      --        --       --       (0.4)        0.4            --                   --

Issuance of stock warrants .................      --       5.0       --         --          --            --                   --

Amortization of restricted stock
  awards ...................................      --        --       --         --         0.1            --                   --

Net loss ...................................      --        --       --         --          --          (6.4)   $  (6.4)       --

Other comprehensive income (loss)
  --foreign currency translation
    adjustments ............................      --        --       --         --          --            --        1.3       1.3

  --Minimum pension liability ..............      --        --       --         --          --            --       (0.3)     (0.3)
                                                                                                                -------

Comprehensive income (loss) ................      --        --       --         --          --            --    $  (5.4)       --
                                              ------   -------   ------    -------      ------      --------    =======   -------

Fiscal first quarter end 2003 ..............    17.3   $  24.4     (2.2)   $ (50.7)     $ (1.2)     $  144.6              $ (12.6)
                                              ======   =======   ======    =======      ======      ========              =======
</TABLE>

                  See notes to condensed financial statements.

                                       4

<PAGE>

                                   MIDAS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

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. 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, 2003 ("first quarter fiscal 2003")
and March 30, 2002 ("first quarter fiscal 2002") and of its financial position
as of March 29, 2003. All such adjustments are of a normal recurring nature. The
results of operations for the first quarter fiscal 2003 and 2002 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, 2003 and March 30, 2002 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
2002 financial statements in order to provide consistency with the fiscal 2003
results. These reclassifications did not affect previously reported operating
income, net income or earnings per share.

2. Supplemental Cash Flow Activity

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

<TABLE>
<CAPTION>
                                                                       For the quarter
                                                                      ended fiscal March
                                                                      ------------------
                                                                      2003           2002
                                                                      ----           ----
        <S>                                                       <C>            <C>
        Interest paid .........................................   $    4.9       $    0.9
        Income tax refunds ....................................       (3.0)          (3.0)
        Income taxes paid .....................................        0.1             --
</TABLE>

3.  Inventories

      Inventories, summarized by major classification, were as follows (in
millions):

<TABLE>
<CAPTION>
                                                                     Fiscal         Fiscal
                                                                     March         December
                                                                      2003           2002
                                                                      ----           ----
                                                                 (Unaudited)
        <S>                                                       <C>              <C>
        Raw materials and work in process .....................     $  2.4           $  2.1
        Finished goods ........................................       82.6             92.5
                                                                    ------           ------
                                                                    $ 85.0           $ 94.6
                                                                    ======           ======
</TABLE>

                                       5

<PAGE>

4.  Business Transformation Charges

      The Company recorded business transformation charges of $5.1 million
during the first quarter of fiscal 2003. The charges include $1.8 million for
terminated re-financing efforts, $1.4 million for the loss on extinguishment of
prior debt, $0.8 million of non-recoverable lease costs, $0.7 million of
severance and other separation costs, $0.2 million of fixed asset write-downs,
and $0.2 million of other charges.

      The activity affecting the accrual for business transformation charges
during fiscal 2003 is as follows (shown in millions):

<TABLE>
<CAPTION>
                                                               Closure or      Redesign of    Administrative
                                                              Re-franchise      Wholesale         Costs,
                                               Disposition     of Company     Distribution    Severance and
                                                  of PWI          Shops          Network       Other Costs       Total
                                                  ------          -----          -------       -----------       -----
       <S>                                     <C>            <C>             <C>             <C>                <C>
       Balance at December 28, 2002 ..........   $   5.2         $   1.4         $   2.0         $   3.2         $ 11.8
           Cash payments .....................      (0.3)           (0.1)           (0.1)           (3.0)          (3.5)
           Non-cash utilization ..............        --              --              --            (0.5)          (0.5)
           2003 business transformation
            charges ..........................       0.4             1.2              --             3.5            5.1
           2003  non-cash business
            transformation charges ...........        --            (0.2)             --            (0.5)          (0.7)
                                                 -------         -------         -------         -------         ------
       Balance at March 29, 2003 .............   $   5.3         $   2.3         $   1.9         $   2.7         $ 12.2
                                                 =======         =======         =======         =======         ======
</TABLE>

5.  Debt Agreement

      The Company's revolving credit facility was scheduled to expire in January
2003. Prior to its expiration, the lenders extended the maturity date to March
31, 2003. On March 27, 2003, the Company entered into a comprehensive debt
restructuring with its existing lenders. Under the terms of the debt
restructuring, the Company retired both its $100 million revolving credit
facility as well as $45 million in unsecured notes.

      The replacement facilities reflect an aggregate commitment of $172.5
million and consist of a $40 million revolving loan facility, a $92.5 million
Term Loan A, and a $40 million Term Loan B. The new facilities are secured by
substantially all of the assets of the Company and expire on October 3, 2004.
Interest on the revolving loan is payable monthly at the prime rate plus 2.75%
or LIBOR plus 3.75%. Interest on a portion of the Term Loan A is fixed at 7.67%,
while interest on the balance of Term Loan A is payable monthly at the prime
rate plus 5.0% or LIBOR plus 6.0%. The interest rate on the Term Loan B is fixed
at 12% cash interest paid quarterly plus 6% paid-in-kind ("PIK"), which is added
to principal and due at maturity. On January 4, 2004, the PIK interest rate can
be increased to 8% if the Company fails to meet certain financial objectives.

      Availability under the revolving credit facility is based on a borrowing
base, which takes into consideration the Company's inventory and accounts
receivable levels. The revolving credit facility is senior to both the Term Loan
A and Term Loan B.

      The new facilities require maintenance of certain financial covenants
including maximum allowable leverage and minimum net worth. No scheduled
amortization payments are due. The facilities require mandatory prepayments from
(i) all proceeds from the sale or disposition of assets of the Company (other
than the sale of inventory in the normal course of business), and (ii) 75% of
excess cash flow (as defined in the loan agreement), both of which are subject
to minimum liquidity requirements.

      In connection with the debt restructuring, the Company issued detachable
warrants to its existing lenders for 1.0 million shares of the Company's common
stock. If the Company meets certain financial objectives by January 3, 2004,
fifty percent of the warrants (500,000) will be returned to the Company. The
exercise price of the warrants is $0.01, and the warrants are exercisable at any
time up to the tenth anniversary of issuance, except that 500,000 of the
warrants are not exercisable until January 4, 2004.

                                       6

<PAGE>

      The 1.0 million warrants have been valued at $5.0 million. This amount was
recorded as a discount to the Company's new term loans, with a corresponding
increase in paid-in capital.

6.  Stock-Based Compensation

      Stock options granted under the company's stock incentive plans are
granted at market prices on the date of grant and generally vest over three or
five years commencing one year after the date of the grant.

      Midas accounts for stock-based compensation in accordance with the
provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations using the intrinsic value
method, which resulted in no compensation cost for options granted.

     Midas's net income and earnings (loss) per share would have been reduced to
the pro forma amounts shown below if compensation cost had been determined based
on the fair value at the grant dates in accordance with SFAS Nos. 123 and 148,
"Accounting for Stock-Based Compensation."

<TABLE>
<CAPTION>
 Fiscal Year                                                                                  2003          2002
 -----------                                                                                  ----          ----
 <S>                                                                                       <C>          <C>
 Net income (loss)
     As reported ........................................................................  $    (6.4)   $      1.7
     Less: fair value impact of employee stock compensation, net of taxes ...............       (0.4)         (0.2)
                                                                                               -----         -----
     Pro forma ..........................................................................  $    (6.8)   $      1.5
                                                                                               -----         -----
 Basic earnings (loss) per share
     As reported ........................................................................  $   (0.43)   $     0.12
     Pro forma ..........................................................................      (0.45)         0.10
 Diluted earnings (loss) per share
     As reported ........................................................................  $   (0.43)   $     0.12
     Pro forma ..........................................................................      (0.45)         0.10
</TABLE>

7.  Warranty

     Customers are provided a written warranty from Midas on genuine Midas
products that will be honored at any Midas shop throughout North America. This
warranty is valid for the lifetime of the vehicle, but is voided if the vehicle
is sold. Warranty expense is included in cost of sales and revenues in the
statement of operations and the warranty accrual is included in other
liabilities on the balance sheet.


     Warranty activity for the first quarter of fiscal 2003 is summarized as
follows (in millions):

<TABLE>
     <S>                                                                          <C>
     Accrued warranty expense at beginning of period ...........................  $ 0.5
     Warranty expense ..........................................................    2.9
     Warranty credit issued to franchisees .....................................   (2.9)
                                                                                  -----
     Accrued warranty expense at end of period .................................  $ 0.5
                                                                                  =====
</TABLE>


                                       7

<PAGE>

8.  Subsequent Events

      On April 3, 2003, the Company announced that it entered into a supply
agreement with AutoZone, Inc. to provide weekly distribution of Midas genuine
products and other automotive parts to Midas dealers throughout the United
States. Midas currently distributes these parts to Midas dealers through its 12
North American distribution centers. On that same date, the Company announced
that it had signed a letter of intent with Uni-Select Inc. to provide similar
distribution services to Midas dealers in Canada. As part of these agreements,
both AutoZone and Uni-Select will also provide just-in-time parts delivery to
Midas dealers. As a result of these supply agreements, the Company expects to
exit the traditional Midas wholesale parts distribution business by the end of
fiscal 2003. This will involve the closing of all but one of Midas' existing
regional distribution centers and will result in additional business
transformation charges over the next several quarters for severance,
non-recoverable lease costs, excess inventory write-downs and reductions of
corporate administrative overhead. The amount and timing of these charges has
not yet been finalized.

      Also as a result of exiting the Midas wholesale distribution business, the
Company will record a substantial charge to reflect an estimate of the
redemption value of outstanding warranty claims associated with the lifetime
guarantee of Midas genuine products. Previously, the Company did not maintain an
accrual for outstanding warranty claims. This was due to the fact that the
average warranty claim generated gross profit to the Company, as the revenues
and gross profit to Midas from a warranty claim exceeds the cost of
reimbursement to the franchisee. Without the traditional wholesale distribution
business, Midas will no longer generate gross profit on the average warranty
claim and thus will establish a reserve for outstanding warranties. On a going
forward basis, Midas will then accrue for the expected future cost of warranty
redemptions at the time of the original installation. This treatment will not
affect cash flow associated with warranty redemptions.

      The traditional Midas wholesale business has been in steady decline since
1999. Most recently, the gross profit generated from the sale of parts has not
been sufficient to cover both warranty expense and the cost of operating
distribution centers. As the Company exits the distribution business, the gross
profit associated with parts sales will cease as will the expense associated
with operating distribution centers. While warranty expense will remain, the
Company will receive rebates from AutoZone and Uni-Select that it expects will
offset this expense.

                                       8

<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.

LIQUIDITY AND CAPITAL RESOURCES

      Midas' cash and cash equivalents increased $1.7 million in the first
quarter of fiscal 2003.

     The Company's operating activities used net cash of $4.6 million during the
first quarter of fiscal 2003 compared to $2.1 million of cash used in the first
quarter of fiscal 2002. The year-over-year increase of $2.5 million was
primarily due to an $8.1 million decrease in net income, partially offset by a
$2.1 million increase in business transformation costs (net of payments), higher
depreciation, and changes in assets and liabilities requiring $3.0 million less
cash than the prior year. The $3.0 million reduction in cash required by assets
and liabilities was due to a $9.6 million reduction in inventory (compared to a
$0.2 million reduction in fiscal 2002), offset by a $6.9 million increase in
other assets related to deferred financing costs. Receivables experienced their
normal seasonal increase.

      Investing activities generated $2.3 million in cash during the first
quarter of fiscal 2003 compared to using $4.8 million in cash during the
comparable quarter one year ago. Fiscal 2003 investing activities primarily
consisted of $1.0 million in systems development projects and other maintenance
capital expenditures, and $3.7 million in cash generated as the result of asset
sales. During the first quarter of fiscal 2003, the Company generated cash
through a sale and leaseback of the Company's Taunton distribution facility and
the sale of certain Parts Warehouse, Inc. (PWI) locations. Fiscal 2002 investing
activities primarily consisted of ongoing systems development and capital
expenditures to upgrade 72 company-operated shops acquired during the fourth
quarter of fiscal 2001.

     Net cash provided by financing activities was $4.0 million in the first
quarter of fiscal 2003, compared to net cash generated of $7.4 million in the
first quarter of fiscal 2002. In fiscal 2003, the Company issued 1.0 million
warrants, which were valued at $5.0 million and recorded as an increase in
paid-in capital. Additionally, the Company had a net reduction in debt of $1.0
million. In fiscal 2002, the cash was primarily generated through increases in
borrowings. The Company suspended the payment of dividends to shareholders in
2002 and does not expect that it will resume dividend payments in the near
future.

      During fiscal 2003, the Company expects to improve liquidity through the
implementation of its business transformation initiatives. These include the
disposition of PWI, the closing and re-franchising of certain company-operated
shops, and the closing of additional wholesale distribution centers. The Company
expects to generate increased cash flow from these actions as a result of
reduced wholesale network inventory requirements and cash proceeds from the sale
of PWI locations and the liquidation of associated PWI inventory.

      The Company's revolving credit facility was scheduled to expire in January
2003. Prior to its expiration, the lenders extended the maturity date to March
31, 2003. On March 27, 2003, the Company entered into a comprehensive debt
restructuring with its existing lenders. Under the terms of the debt
restructuring, the Company retired both its $100 million revolving credit
facility as well as $45 million in unsecured notes.

      The replacement facilities reflect an aggregate commitment of $172.5
million and consist of a $40 million revolving loan facility, a $92.5 million
Term Loan A, and a $40 million Term Loan B. The new facilities are secured by
substantially all of the assets of the Company and expire on October 3, 2004.
Interest on the revolving loan is payable monthly at the prime rate plus 2.75%
or LIBOR plus 3.75%. Interest on a portion of the Term Loan A is fixed at 7.67%,
while interest on the balance of Term Loan A is payable monthly at the prime
rate plus 5.0% or LIBOR plus 6.0%. The interest rate on the Term Loan B is fixed
at 12% cash interest paid quarterly plus 6% paid-in-kind ("PIK"), which is added
to principal and due at maturity. On January 4, 2004, the PIK interest rate can
be increased to 8% if the Company fails to meet certain financial objectives.

      Availability under the revolving credit facility is based on a borrowing
base, which takes into consideration the Company's inventory and accounts
receivable levels. The revolving credit facility is senior to both the Term Loan
A and Term Loan B.

      The new facilities require maintenance of certain financial covenants
including maximum allowable leverage and minimum net worth. No scheduled
amortization payments are due. The facilities require mandatory prepayments from
(i) all proceeds from the sale or disposition of assets of the Company (other
than the sale of inventory in the normal course of business), and (ii) 75% of
excess cash flow (as defined in the loan agreement), both of which are subject
to minimum liquidity requirements.

                                       9

<PAGE>

      In connection with the debt restructuring, the Company issued detachable
warrants to its existing lenders for 1.0 million shares of the Company's common
stock. If the Company meets certain financial objectives by January 3, 2004,
fifty percent of the warrants (500,000) will be returned to the Company. The
exercise price of the warrants is $0.01, and the warrants are exercisable at any
time up to the tenth anniversary of issuance, except that 500,000 of the
warrants are not exercisable until January 4, 2004.

RESULTS OF OPERATIONS

The Midas Business Transformation

      The Company is in the process of transforming its business. As part of the
Company's ongoing business transformation, the Company has developed and is
implementing strategic initiatives, which it believes will enhance its long-term
competitive position. The Company believes these initiatives will enable it to
increase its market share, improve revenues, reduce costs and enhance
sustainable profitability while delivering critical products and services to its
customers. These initiatives include the disposition of the PWI business, the
closure and re-franchising of certain company-operated shops and the redesign of
the Company's wholesale parts distribution network. In addition, the Company
will continue to reduce its administrative expenses in conjunction with the
implementation of these strategic initiatives. The implementation of these
initiatives will have the effect of substantially lowering overall Company
revenues and expenses. This transformation process is not expected to be
complete until the first half of fiscal 2004. In addition, the implementation of
the Company's strategic initiatives will result in business transformation
charges in each of the next several quarters.

      The Company continues to sell and close PWI locations and expects that it
will no longer operate the PWI distribution network by the end of fiscal 2003.
Furthermore, on April 3, 2003, the Company announced that it would enter supply
agreements with AutoZone, Inc. and Uni-Select, Inc. to provide Midas dealers
throughout North America with the distribution of Midas genuine parts on a
weekly basis comparable to the distribution service currently provided by Midas'
traditional wholesale distribution business. Additionally, these organizations
have agreed to serve the just-in-time parts supply requirements of Midas
dealers. Upon the transition to these supply agreements, the Company will no
longer operate the traditional Midas wholesale distribution business.

First Quarter Fiscal 2003 Compared with First Quarter Fiscal 2002

      The following is a summary of the Company's sales and revenues for the
first quarter of fiscal 2003 and 2002: ($ Millions)

<TABLE>
<CAPTION>
                                                                         Percent                     Percent
                                                              2003      to Total            2002    to Total
                                                              ----      --------            ----    --------
       <S>                                              <C>             <C>           <C>           <C>
       Replacement parts sales ......................   $     39.6         53.2%      $     43.4        53.3%
       Company-operated shop retail sales ...........         11.7         15.7             13.8        16.9
       Royalties and license fees ...................         13.6         18.2             14.4        17.7
       Real estate rental revenues ..................          9.0         12.1              9.4        11.6
       Other ........................................          0.6          0.8              0.4         0.5
                                                        ----------       ------       ----------      ------
           Total sales and revenues .................   $     74.5        100.0%      $     81.4       100.0%
                                                        ==========       ======       ==========      ======
</TABLE>

      Sales and revenues for the first quarter of fiscal 2003 decreased $6.9
million or 8.5% from the first quarter of fiscal 2002 to $74.5 million.

      Replacement parts sales decreased $3.8 million to $39.6 million from $43.4
million in the first quarter of fiscal 2002. Replacement parts sales through the
Company's traditional wholesale distribution channel declined 4.7%, driven
mostly by weakness in demand for replacement exhaust systems and increased
just-in-time parts sourcing by traditional wholesale customers. Replacement
parts sales through the Company's PWI wholesale distribution channel, which
serves the just-in-time replacement parts needs of Midas dealers and customers
outside the Midas system, decreased 17.2%, primarily reflecting a reduction in
the number of stores from the prior year as a result of the Company's previously
announced business transformation process. As of March 29, 2003, the Company
operated 50 PWI stores compared to 74 stores at the end of the first quarter in
fiscal 2002.

                                       10

<PAGE>

      Within the retail auto service business, royalty revenues and license fees
were down 5.6% from the first quarter of 2002 due to a 2% comparable shop
decline in system-wide Midas retail sales and a reduction in the Midas system
total shop count. Revenues from company-operated shops declined $2.1 million, or
a decrease of 15.2% from the same period in fiscal 2002. The sales decrease
primarily reflects declines in comparable shop sales in excess of 10%.
Additionally, 10 under-performing company-operated shops were closed during the
quarter. Thus, the number of company-operated shops in operation at March 29,
2003 declined to 101, compared to 108 shops at the end of the first quarter in
fiscal 2002. Revenues from real estate rentals declined slightly. The decline in
system-wide retail sales negatively impacted real estate revenues, as certain
franchisees pay rent based upon a percentage of retail sales.

      Gross profit margin decreased to 48.1% in the first quarter of fiscal 2003
from 49.8% in the first quarter of fiscal 2002. This decline was due to lower
margins in the Company's IPC and PWI parts distribution businesses. While
product margins in PWI locations still in operation were improved over the prior
year, inventory liquidation activities associated with the sale of certain PWI
locations negatively impacted the overall Company gross margins.

      Selling, general and distribution expenses for the first quarter of 2003
increased $2.2 million, or 6.3% from 2002 to $37.3 million. In the first quarter
of fiscal 2002, the Company's expenses benefited from an advertising credit of
approximately $3.0 million. Excluding this credit, selling, general and
distribution expenses decreased $0.8 million in the first quarter of fiscal 2003
compared to fiscal 2002. This decrease in expenses was the result of lower
operating expenses associated with fewer PWI and company-operated shop
locations, and reductions in corporate administrative expenses, partially offset
by incremental expenses incurred to shut down locations and transfer inventory
back to distribution centers.

      During the quarter, the Company recorded a charge of $5.1 million related
to the Company's ongoing business transformation activities. The charges
primarily reflect certain expenses related to the Company's recent refinancing
actions, severance and lease costs related to PWI and company-operated shop
closures during the quarter, and severance charges for certain former executives
who left the Company during the quarter.

      As a result of the above changes, operating income declined $12.0 million
from income of $5.4 million in the first quarter of 2002 to a loss of $6.6
million in the first quarter of 2003. These changes caused a decrease in
operating income margin from 6.6% in the first quarter of 2002 to negative 8.9%
in the first quarter of 2003.

      Interest expense increased from $2.6 million in the first quarter of 2002
to $4.3 million in the first quarter of 2003 as result of both higher debt
levels and higher interest rates charged on that debt compared to the prior
year.

      The Company's effective tax rate was 38.9% in the first quarter of both
fiscal 2002 and fiscal 2003.

      As a result of the above items, net income decreased $8.1 million from
income of $1.7 million in the first quarter of 2002 to a loss of $6.4 million in
the first quarter of 2003.

                                       11

<PAGE>

      CRITICAL ACCOUNTING POLICIES

      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 and the nature of its
business, 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.

      Inventory Valuation

      As a manufacturer and distributor of automotive aftermarket parts,
inventory represents a substantial portion of the total assets of the Company.
Therefore the Company must periodically evaluate the carrying value of its
inventory to assess the proper valuation. This includes having adequate accruals
to cover losses in the normal course of operation, provide for excess and
obsolete inventory, and ensure that inventory is valued at the lower of cost or
market. In performing this evaluation the Company considers historical data such
as actual loss experience, past and projected usage, and actual margins
generated from sales of its products.

      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, 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," which requires that amounts recognized
in the financial statements be determined on an actuarial basis. A minimum
liability is required to be established on the balance sheet representing the
amount of unfunded accrued pension cost. This represents the difference between
the accumulated benefit obligation and the fair value of plan assets. When it is
necessary to establish an additional minimum pension liability, an amount is
recorded as an intangible asset limited to unrecognized prior service cost. Any
amount in excess of unrecognized prior service cost is recorded as a reduction
to shareholders' equity through cumulative other comprehensive income, net of
tax, in the balance sheet.

      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. 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 obligation for
the end of the current fiscal year and to determine the net periodic pension
cost for the subsequent year. 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.

                                       12

<PAGE>

      Carrying Values of Goodwill and Long-Lived Assets

      Goodwill represents the amount paid in consideration for an acquisition in
excess of the net tangible assets acquired. In accordance with SFAS No. 142, the
Company did not amortize goodwill for new acquisitions made after June 30, 2001.
For acquisitions prior to that date, the Company continued to amortize goodwill
through the end of fiscal 2001. The Company conducts tests for impairment of
goodwill annually 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 operating unit.
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 fixed assets down to their estimated recovery
value.

      Self-Insurance Reserves

      The Company is largely self-insured with respect to workers compensation,
general liability, and employee medical claims. In order to reduce its risk and
better manage its overall loss exposure, the Company purchases stop-loss
insurance that covers individual claims in excess of the deductible amounts. The
Company maintains an accrual for the estimated cost to settle open claims as
well as an estimate of the cost of claims that have been incurred but not
reported. These estimates take into consideration the historical average monthly
claim volume, the average cost for settled claims, current trends in claim
costs, changes in the Company's business and workforce, and general economic
factors. These accruals are reviewed on a quarterly basis, or more frequently if
factors dictate a more frequent review.

      NEW ACCOUNTING PRONOUNCEMENTS

      In November 2002, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness to Others," an
interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB
Interpretation No. 34. This Interpretation elaborates on the disclosures to be
made by a guarantor in its interim and annual financial statements about its
obligations under guarantees issued. The Interpretation also clarifies that a
guarantor is required to recognize, at inception of a guarantee, a liability for
the fair value of the obligation undertaken. The initial recognition and
measurement provisions of the Interpretation are applicable to guarantees issued
or modified after December 31, 2002 and did not have a material effect on the
Company's financial statements. The disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002.

      In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
SFAS No. 145 amends existing guidance on reporting gains and losses on the
extinguishment of debt to prohibit the classification of the gain or loss as
extraordinary, as the use of such extinguishments have become part of the risk
management strategy of many companies. SFAS No. 145 also amends SFAS No. 13 to
require sale-leaseback accounting for certain lease modifications that have
economic effects similar to sale-leaseback transactions. The provisions of the
Statement related to the rescission of Statement No. 4 are applied in fiscal
years beginning after May 15, 2002. Earlier application of these provisions is
encouraged. The provisions of the Statement related to Statement No. 13 were
effective for transactions occurring after May 15, 2002, with early application
encouraged. The adoption of SFAS No. 145 did not have a material effect on the
Company's 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

                                       13

<PAGE>

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; cost and availability of raw materials; 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. The Company's primary exposure is to changes in exchange rates for
the U.S. dollar versus the Canadian dollar.

     Interest rate risk is managed through a combination of fixed rate debt and
variable rate 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.

Item 4. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures.

      Our Chief Executive Officer and Chief Financial Officer have concluded,
based upon their evaluation within 90 days of the filing date of this report,
that our disclosure controls and procedures are effective in ensuring that
information required to be disclosed in the reports that we file or submit under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.

(b) Changes in internal controls.

      During the past four years, the Company has been in the process of
implementing an enterprise resource planning ("ERP") system on a company-wide
basis. At the same time, the Company has been developing and implementing a new
point-of-sale ("POS") system for use in its company-operated shops and Parts
Warehouse, Inc. locations. As we believe is the case in most system changes, the
implementation of these systems has necessitated changes in operating policies
and procedures and the related internal controls and their method of
application. We believe that throughout this implementation, the Company has
maintained internal accounting control systems that are adequate to provide
reasonable assurance that assets are safeguarded from loss or unauthorized use,
and which produce records adequate for preparation of financial information.

                                       14

<PAGE>

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

         None

Item 2.  Changes in Securities and Use of Proceeds.

         None

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 and Reports on Form 8-K.

(a)      Exhibits

10.24 Supply Agreement dated as of April 2, 2003, by and among Midas
International Corporation, Parts Warehouse, Inc. and AutoZone, Inc.

99.1 Certification of first quarter 2003 financial statements pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

(b)      Reports on Form 8-K

During the first quarter of fiscal 2003, Midas filed 1 report on form 8-K with
the Securities and Exchange Commission reporting matters under Item 5 - Other
Events:

1. Fiscal 2002 full year earnings press release dated March 18, 2003.

                                       15

<PAGE>

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 13, 2003                  /s/  Alan D. Feldman
                                       -----------------------------------
                                       Alan D. Feldman
                                       President and Chief Executive Officer

                                       /s/ William M. Guzik
                                       -----------------------------------
                                       William M. Guzik
                                       Senior Vice President and Chief Financial
                                       Officer

                                       /s/  James M. Haeger, Jr.
                                       -----------------------------------
                                       James M. Haeger, Jr.
                                       Vice President and Controller

                                       16

<PAGE>

CERTIFICATIONS

I, Alan D. Feldman, President and Chief Executive Officer of Midas,
Inc. (the registrant), certify that:

     1.    I have reviewed this quarterly report on Form 10-Q of Midas, Inc.;

     2.    Based on my knowledge, this quarterly report does not contain any
           untrue statement of a material fact or omit to state a material fact
           necessary to make the statements made, in light of the circumstances
           under which such statements were made, not misleading with respect to
           the period covered by this quarterly report;

     3.    Based on my knowledge, the financial statements, and other financial
           information included in this quarterly report, fairly present in all
           material respects the financial condition, results of operations and
           cash flows of the registrant as of, and for, the periods presented in
           this quarterly report;

     4.    The registrant's other certifying officer and I are responsible for
           establishing and maintaining disclosure controls and procedures (as
           defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
           and we have:

           a)  designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               quarterly report is being prepared;

           b)  evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

           c)  presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.    The registrant's other certifying officer and I have disclosed, based
           on our most recent evaluation, to the registrant's auditors and the
           audit committee of the registrant's board of directors (or persons
           performing the equivalent function):

           a)  all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

           b)  any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

     6.    The registrant's other certifying officer and I have indicated in
           this quarterly report whether or not there were significant changes
           in internal controls or in other factors that could significantly
           affect internal controls subsequent to the date of our most recent
           evaluation, including any corrective actions with regard to
           significant deficiencies and material weaknesses.

Date:    May 13, 2003:                     /s/  Alan D. Feldman
                                           ----------------------
                                           Alan D. Feldman
                                           President and Chief Executive Officer

                                       17

<PAGE>

I, William M. Guzik, Senior Vice President and Chief Financial Officer of
Midas, Inc. (the registrant), certify that:

     1.    I have reviewed this quarterly report on Form 10-Q of Midas, Inc.;

     2.    Based on my knowledge, this quarterly report does not contain any
           untrue statement of a material fact or omit to state a material fact
           necessary to make the statements made, in light of the circumstances
           under which such statements were made, not misleading with respect to
           the period covered by this quarterly report;

     3.    Based on my knowledge, the financial statements, and other financial
           information included in this quarterly report, fairly present in all
           material respects the financial condition, results of operations and
           cash flows of the registrant as of, and for, the periods presented in
           this quarterly report;

     4.    The registrant's other certifying officer and I are responsible for
           establishing and maintaining disclosure controls and procedures (as
           defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
           and we have:

           a)  designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               quarterly report is being prepared;

           b)  evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

           c)  presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.    The registrant's other certifying officer and I have disclosed, based
           on our most recent evaluation, to the registrant's auditors and the
           audit committee of the registrant's board of directors (or persons
           performing the equivalent function):

           a)  all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

           b)  any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

     6.    The registrant's other certifying officer and I have indicated in
           this quarterly report whether or not there were significant changes
           in internal controls or in other factors that could significantly
           affect internal controls subsequent to the date of our most recent
           evaluation, including any corrective actions with regard to
           significant deficiencies and material weaknesses.

Date:    May 13, 2003:                     /s/  William M. Guzik
                                           ----------------------
                                           William M. Guzik
                                           Senior Vice President and Chief
                                           Financial Officer

                                       18