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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q/A

(Amendment No. 1)



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|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



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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, Illinos                   |  | 60143                               
|(Address of Principal Executive Offices)                       |  | (Zip Code)                          



(630) 438-3000

(Registrants telephone number, including area code)



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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.



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Explanatory Note



In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, we are filing this Amendment No. 1 on Form 10-Q/A in
response to comments received from the staff of the Securities and Exchange Commission in connection with their review of our Registration Statement on Form S-3 (File No. 333-105458). That Registration Statement incorporates this Quarterly Report by
reference.



This Amendment makes certain changes in the form of additional or
supplemental disclosure to Items 1, 2 and 4 of Part I and Items 2 and 6 (to reflect the inclusion of updated exhibits) of Part II. Please note that we have not been requested to, and we are not, restating our financial results. However, for ease of
reference and consistency of presentation, we have elected to include a revised Item 1 of Part I in its entirety in this Quarterly Report.



This report speaks as of the original filing date of our Quarterly Report (May 13, 2003) and, except as indicated below, has not been updated to reflect events occurring
subsequent to that date. All information contained in this and our previous filings is subject to updating and supplementing as provided in our periodic reports filed with the Securities and Exchange Commission.



PART I.    FINANCIAL INFORMATION



Item 1:     Financial Statements



MIDAS, INC.



CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except for earnings per share)



|                                                 |  | For the quarter ended fiscal March |      
|------------------------------------------------ |  | ---------------------------------- | -----
|                                                 |  | 2003                               |      
|                                                 |  | (13 Weeks)                         |      
|Sales and revenues:                              |  |                                    |      
|Sales of replacement parts                       |  | $                                  | 39.6 
|Franchise royalties and license fees             |  |                                    | 13.6 
|Company-operated shop retail sales               |  |                                    | 11.7 
|Real estate revenues                             |  |                                    | 9.0  
|Other                                            |  |                                    | 0.6  
|                                                 |  |                                    |      
|Total sales and revenues                         |  |                                    | 74.5 
|                                                 |  |                                    |      
|Cost of sales and revenues:                      |  |                                    |      
|Replacement parts cost of sales                  |  |                                    | 28.1 
|Company-operated shop cost of sales              |  |                                    | 2.6  
|Real estate cost of revenues                     |  |                                    | 5.1  
|Warranty expense                                 |  |                                    | 2.9  
|                                                 |  |                                    |      
|Total cost of sales and revenues                 |  |                                    | 38.7 
|                                                 |  |                                    |      
|Gross profit                                     |  |                                    | 35.8 
|Selling, general, and distribution expenses      |  |                                    | 37.3 
|Business transformation charges                  |  |                                    | 5.1  
|                                                 |  |                                    |      
|Operating income (loss)                          |  |                                    | (6.6 
|Interest expense                                 |  |                                    | (4.3 
|Other income, net                                |  |                                    | 0.4  
|                                                 |  |                                    |      
|Income (loss) before income taxes (benefit)      |  |                                    | (10.5
|Income taxes (benefit)                           |  |                                    | (4.1 
|                                                 |  |                                    |      
|Net income (loss)                                |  | $                                  | (6.4 
|                                                 |  |                                    |      
|Earnings (loss) per share:                       |  |                                    |      
|Basic                                            |  | $                                  | (0.43
|                                                 |  |                                    |      
|                                                 |  |                                    |      
|Diluted                                          |  | $                                  | (0.43
|                                                 |  |                                    |      
|Average number of shares:                        |  |                                    |      
|Common shares outstanding                        |  |                                    | 15.0 
|Common stock warrants not subject to restriction |  |                                    |     
|                                                 |  |                                    |      
|Shares applicable to basic earnings              |  |                                    | 15.0 
|Equivalent shares on outstanding stock options   |  |                                    |     
|                                                 |  |                                    |      
|Shares applicable to diluted earnings            |  |                                    | 15.0 
|                                                 |  |                                    |      



See notes to condensed
financial statements.



1



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MIDAS, INC.



CONDENSED BALANCE SHEETS

(In millions)



|                                                                                                             |  | Fiscal March 2003 |       |   | Fiscal December 2002 |  
|------------------------------------------------------------------------------------------------------------ |  | ----------------- | ----- | - | -------------------- | -
|                                                                                                             |  | (Unaudited)       |       |   |                      |  
|Assets:                                                                                                      |  |                   |       |   |                      |  
|Current assets:                                                                                              |  |                   |       |   |                      |  
|Cash and cash equivalents                                                                                    |  | $                 | 2.2   |   |                      | $
|Receivables, net                                                                                             |  |                   | 57.3  |   |                      |  
|Inventories, net                                                                                             |  |                   | 85.0  |   |                      |  
|Other current assets                                                                                         |  |                   | 50.8  |   |                      |  
|                                                                                                             |  |                   |       |   |                      |  
|Total current assets                                                                                         |  |                   | 195.3 |   |                      |  
|Property and equipment, net                                                                                  |  |                   | 149.9 |   |                      |  
|Intangible assets                                                                                            |  |                   | 12.3  |   |                      |  
|Other assets                                                                                                 |  |                   | 13.6  |   |                      |  
|                                                                                                             |  |                   |       |   |                      |  
|Total assets                                                                                                 |  | $                 | 371.1 |   |                      | $
|                                                                                                             |  |                   |       |   |                      |  
|Liabilities and Equity:                                                                                      |  |                   |       |   |                      |  
|Current liabilities:                                                                                         |  |                   |       |   |                      |  
|Current portion of long-term obligations                                                                     |  | $                 | 1.7   |   |                      | $
|Accounts payable                                                                                             |  |                   | 23.5  |   |                      |  
|Accrued expenses                                                                                             |  |                   | 34.3  |   |                      |  
|                                                                                                             |  |                   |       |   |                      |  
|Total current liabilities                                                                                    |  |                   | 59.5  |   |                      |  
|Long-term debt                                                                                               |  |                   | 132.1 |   |                      |  
|Obligations under capital leases                                                                             |  |                   | 7.1   |   |                      |  
|Finance lease obligation                                                                                     |  |                   | 38.2  |   |                      |  
|Deferred income taxes and other liabilities                                                                  |  |                   | 29.7  |   |                      |  
|                                                                                                             |  |                   |       |   |                      |  
|Total liabilities                                                                                            |  |                   | 266.6 |   |                      |  
|                                                                                                             |  |                   |       |   |                      |  
|Shareholders equity:                                                                                        |  |                   |       |   |                      |  
|Common stock ($.001 par value, 100 million shares authorized;17.3 million shares issued) and paid-in capital |  |                   | 24.4  |   |                      |  
|Treasury stock, at cost (2.2 million shares and 2.3 million shares)                                          |  |                   | (50.7 | ) |                      |  
|Unamortized restricted stock awards                                                                          |  |                   | (1.2  | ) |                      |  
|Retained income                                                                                              |  |                   | 144.6 |   |                      |  
|Cumulative other comprehensive loss                                                                          |  |                   | (12.6 | ) |                      |  
|                                                                                                             |  |                   |       |   |                      |  
|Total shareholders equity                                                                                   |  |                   | 104.5 |   |                      |  
|                                                                                                             |  |                   |       |   |                      |  
|Total liabilities and equity                                                                                 |  | $                 | 371.1 |   |                      | $
|                                                                                                             |  |                   |       |   |                      |  



See notes to condensed
financial statements.



2



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MIDAS, INC.



CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)



|                                                                                                                          |  | For the quarterended fiscal March |     
|------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------- | ----
|                                                                                                                          |  | 2003                              |     
|Cash flows from operating activities:                                                                                     |  |                                   |     
|Net income (loss)                                                                                                         |  | $                                 | (6.4
|Adjustments reconciling net income (loss) to net cash                                                                     |  |                                   |     
|used in operating activities:                                                                                             |  |                                   |     
|Depreciation and amortization                                                                                             |  |                                   | 4.7 
|Business transformation charges                                                                                           |  |                                   | 5.1 
|Cash outlays for business transformation costs                                                                            |  |                                   | (3.5
|Changes in assets and liabilities, exclusive of effects of business transformation charges, acquisitions and
dispositions |  |                                   | (4.5
|                                                                                                                          |  |                                   |     
|Net cash used in operating activities                                                                                     |  |                                   | (4.6
|                                                                                                                          |  |                                   |     
|Cash flows from investing activities:                                                                                     |  |                                   |     
|Capital investments                                                                                                       |  |                                   | (1.0
|Cash paid for acquired businesses                                                                                         |  |                                   | (0.4
|Proceeds from sales of assets                                                                                             |  |                                   | 3.7 
|                                                                                                                          |  |                                   |     
|Net cash provided by (used in) investing activities                                                                       |  |                                   | 2.3 
|                                                                                                                          |  |                                   |     
|Cash flows from financing activities:                                                                                     |  |                                   |     
|Net decrease in short-term debt                                                                                           |  |                                   |    
|Net increase (decrease) in long-term debt                                                                                 |  |                                   | (0.6
|Payment of obligations under capital leases                                                                               |  |                                   | (0.2
|Net decrease in finance lease obligation                                                                                  |  |                                   | (0.2
|Issuance of stock warrants in connection with refinancing                                                                 |  |                                   | 5.0 
|Cash paid for treasury shares                                                                                             |  |                                   |    
|                                                                                                                          |  |                                   |     
|Net cash provided by financing activities                                                                                 |  |                                   | 4.0 
|                                                                                                                          |  |                                   |     
|Net change in cash and cash equivalents                                                                                   |  |                                   | 1.7 
|Cash and cash equivalents at beginning of period                                                                          |  |                                   | 0.5 
|                                                                                                                          |  |                                   |     
|Cash and cash equivalents at end of period                                                                                |  | $                                 | 2.2 
|                                                                                                                          |  |                                   |     



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-in Capital |  |        | Treasury Stock |   |        | UnamortizedRestrictedStock Awards |   |        | RetainedEarnings |       |   | Comprehensive Income (Loss) |        
|----------------------------------------- |  | ------------------------------- |  | ------ | -------------- | - | ------ | --------------------------------- | - | ------ | ---------------- | ----- | - | --------------------------- | -------
|                                          |  | Shares                          |  | Amount |                |   | Shares |                                   |   | Amount |                  |       |   |                             | Current
|Fiscal year end 2002                      |  | 17.3                            |  | $      | 21.9           |   |        | (2.3                              | ) |        | $                | (53.7 | ) |                             | $      
|Purchase of treasury shares               |  |                                |  |        |               |   |        |                                  |   |        |                  | (0.1  | ) |                             |        
|Restricted stock awards                   |  |                                |  |        | (2.5           | ) |        | 0.1                               |   |        |                  | 3.5   |   |                             |        
|Vesting of restricted stock awards        |  |                                |  |        |               |   |        |                                  |   |        |                  |      |   |                             |        
|Forfeiture of restricted stock awards     |  |                                |  |        |               |   |        |                                  |   |        |                  | (0.4  | ) |                             |        
|Issuance of stock warrants                |  |                                |  |        | 5.0            |   |        |                                  |   |        |                  |      |   |                             |        
|Amortization of restricted stock awards   |  |                                |  |        |               |   |        |                                  |   |        |                  |      |   |                             |        
|Net loss                                  |  |                                |  |        |               |   |        |                                  |   |        |                  |      |   |                             |        
|Other comprehensive income (loss)         |  |                                 |  |        |                |   |        |                                   |   |        |                  |       |   |                             |        
|foreign currency translation adjustments |  |                                |  |        |               |   |        |                                  |   |        |                  |      |   |                             |        
|minimum pension liability                |  |                                |  |        |               |   |        |                                  |   |        |                  |      |   |                             |        
|                                          |  |                                 |  |        |                |   |        |                                   |   |        |                  |       |   |                             |        
|Comprehensive income (loss)               |  |                                |  |        |               |   |        |                                  |   |        |                  |      |   |                             |        
|                                          |  |                                 |  |        |                |   |        |                                   |   |        |                  |       |   |                             |        
|Fiscal first quarter end 2003             |  | 17.3                            |  | $      | 24.4           |   |        | (2.2                              | ) |        | $                | (50.7 | ) |                             | $      
|                                          |  |                                 |  |        |                |   |        |                                   |   |        |                  |       |   |                             |        



See notes to condensed
financial statements.



4



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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.



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



|                                                 |  | For the quarterended fiscal March
|------------------------------------------------ |  | ---------------------------------
|                                                 |  | 2003                             
|Weighted-average common shares outstanding       |  | 15.0                             
|Common stock warrants not subject to restriction |  |                                 
|                                                 |  |                                  
|Shares applicable to basic earnings              |  | 15.0                             
|Effect of dilutive stock options and warrants    |  |                                 
|                                                 |  |                                  
|Shares applicable to diluted earnings            |  | 15.0                             
|                                                 |  |                                  
|Potential common share equivalents:              |  |                                  
|Stock options                                    |  | 1.8                              
|Warrants subject to restriction                  |  | 0.5                              
|                                                 |  |                                  
|Total shares excluded                            |  | 2.3                              
|                                                 |  |                                  



Potential common share
equivalents have been excluded from diluted earnings per share as they would have an anti-dilutive effect.



On March 27, 2003, the Company entered into a comprehensive debt restructuring with its existing lenders. 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. For purposes of
calculating earnings per share, all warrants were treated as outstanding beginning March 27, 2003. The 500,00 warrants not subject to return provisions are included in the basic earnings per share calculation. The 500,00 warrants that are subject to
return are included within potential common share equivalents and excluded from earnings per share as their impact would be anti-dilutive.



2.    Supplemental Cash Flow Activity



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



|                   |  | For the quarterended fiscal March |     
|------------------ |  | --------------------------------- | ----
|                   |  | 2003                              |     
|Interest paid      |  | $                                 | 4.9 
|Income tax refunds |  |                                   | (3.0
|Income taxes paid  |  |                                   | 0.1 



3.    Inventories



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



|                                  |  | FiscalMarch 2003 |      | FiscalDecember 2002
|--------------------------------- |  | ---------------- | ---- | -------------------
|                                  |  | (Unaudited)      |      |                    
|Raw materials and work in process |  | $                | 2.4  |                    
|Finished goods                    |  |                  | 82.6 |                    
|                                  |  |                  |      |                    
|                                  |  | $                | 85.0 |                    
|                                  |  |                  |      |                    





5



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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):



|                                              |  | Dispositionof PWI |      |   | Closure or Re-franchiseof CompanyShops |   |      | Redesign ofWholesaleDistributionNetwork |  |   | Administrative Costs,Severance andOther Costs |   |  | Total |     
|--------------------------------------------- |  | ----------------- | ---- | - | -------------------------------------- | - | ---- | --------------------------------------- |  | - | --------------------------------------------- | - |  | ----- | ----
|Balance at December 28, 2002                  |  | $                 | 5.2  |   |                                        | $ | 1.4  |                                         |  | $ | 2.0                                           |   |  | $     | 3.2 
|Cash payments                                 |  |                   | (0.3 | ) |                                        |   | (0.1 | )                                       |  |   | (0.1                                          | ) |  |       | (3.0
|Non-cash utilization                          |  |                   |     |   |                                        |   |     |                                         |  |   |                                              |   |  |       | (0.5
|2003 business transformation charges          |  |                   | 0.4  |   |                                        |   | 1.2  |                                         |  |   |                                              |   |  |       | 3.5 
|2003 non-cash business transformation charges |  |                   |     |   |                                        |   | (0.2 | )                                       |  |   |                                              |   |  |       | (0.5
|                                              |  |                   |      |   |                                        |   |      |                                         |  |   |                                               |   |  |       |     
|Balance at March 29, 2003                     |  | $                 | 5.3  |   |                                        | $ | 2.3  |                                         |  | $ | 1.9                                           |   |  | $     | 2.7 
|                                              |  |                   |      |   |                                        |   |      |                                         |  |   |                                               |   |  |       |     



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.



The 1.0 million warrants have been valued at $5.0 million. The net proceeds from the refinancing were allocated between debt and equity based on fair
value in accordance with Accounting Principles Board Opinion No. 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants. As a result, the Company increased paid-in-capital by $5.0 million and recorded a $5.0
million debt discount, which will be amortized over the life of the loan.



The components of debt as of March 29, 2003 and December 28, 2002 were as follows:



|                                 |  | March 29,2003 |       |   | December 28,2002
|-------------------------------- |  | ------------- | ----- | - | ----------------
|Revolving credit facility        |  | $             | 4.6   |   |                 
|Unsecured debt                   |  |               |      |   |                 
|Term loan A                      |  |               | 92.5  |   |                 
|Term loan B                      |  |               | 40.0  |   |                 
|Unamortized debt discount        |  |               | (5.0  | ) |                 
|                                 |  |               |       |   |                 
|Total debt                       |  |               | 132.1 |   |                 
|Less amounts due within one year |  |               |      |   |                 
|                                 |  |               |       |   |                 
|Long-term debt                   |  | $             | 132.1 |   |                 
|                                 |  |               |       |   |                 



Financing fees of $7.6
million paid in connection with the new loan facilities have been capitalized and will be amortized over the term of the new loan agreements. In addition, the Company recorded a loss during the quarter of $1.4 million related to the extinguishment
of the prior debt. This amount is included in business transformation charges in the consolidated statements of operations.



6



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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.



|Fiscal Year                                                                                 |  | 2003 |       |   | 2002 |  
|------------------------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | -
|Net income (loss)                                                                           |  |      |       |   |      |  
|As reported                                                                                 |  | $    | (6.4  | ) |      | $
|Less: fair value impact of employee stock compensation, net of taxes                        |  |      | (0.4  | ) |      |  
|Plus: stock-based compensation expense included in reported net income (loss), net of taxes |  |      |      |   |      |  
|                                                                                            |  |      |       |   |      |  
|Pro forma                                                                                   |  | $    | (6.8  | ) |      | $
|                                                                                            |  |      |       |   |      |  
|Basic earnings (loss) per share                                                             |  |      |       |   |      |  
|As reported                                                                                 |  | $    | (0.43 | ) |      | $
|Pro forma                                                                                   |  |      | (0.45 | ) |      |  
|Diluted earnings (loss) per share                                                           |  |      |       |   |      |  
|As reported                                                                                 |  | $    | (0.43 | ) |      | $
|Pro forma                                                                                   |  |      | (0.45 | ) |      |  



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):



|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  |  
|                                                |  |   |      |  



7



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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



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|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 in connection with the debt restructuring discussed below. These warrants
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



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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 PWI, 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)



|                                   |  | 2003 |      | Percentto Total |       |   | 2002 |   | Percentto Total | 
|---------------------------------- |  | ---- | ---- | --------------- | ----- | - | ---- | - | --------------- | 
|Replacement parts sales            |  | $    | 39.6 |                 | 53.2  | % |      | $ | 43.4            | 
|Company-operated shop retail sales |  |      | 11.7 |                 | 15.7  |   |      |   | 13.8            | 
|Royalties and license fees         |  |      | 13.6 |                 | 18.2  |   |      |   | 14.4            | 
|Real estate rental revenues        |  |      | 9.0  |                 | 12.1  |   |      |   | 9.4             | 
|Other                              |  |      | 0.6  |                 | 0.8   |   |      |   | 0.4             | 
|                                   |  |      |      |                 |       |   |      |   |                 | 
|Total sales and revenues           |  | $    | 74.5 |                 | 100.0 | % |      | $ | 81.4            | 
|                                   |  |      |      |                 |       |   |      |   |                 | 



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



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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



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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



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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



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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 as of the end of the period covered by this report,
that our disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a  15(e) and 15d  15(e)) 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 PWI 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. However, throughout this implementation, there have been no changes in the Companys internal control
over financial reporting that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



14



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|PART II. |  | OTHER INFORMATION
|-------- |  | -----------------



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



|None |  | 
|---- |  | 



|Item 2. |  | Changes in Securities and Use of Proceeds.
|------- |  | ------------------------------------------



In connection with a comprehensive restructuring of the Companys debt on March 27, 2003, the Company issued to the lenders under its credit
facilities warrants to purchase 1,000,000 shares of the Companys common stock at an exercise price of $0.01 per share. The warrants have been valued at $5.0 million. Warrants to purchase 500,000 shares were immediately exercisable at the time
of issuance. The remaining warrants to purchase 500,000 shares become exercisable on January 4, 2004, unless we repay $33 million of term debt under our credit facilities by January 4, 2004, in which case such warrants to purchase 500,000 shares
will be canceled. The issuance of the warrants was exempt from the registration requirements of the Securities Act of 1933, pursuant to Section 4(2) of the Securities Act for transactions not involving a public offering, based on the fact that the
warrants were offered and sold to accredited investors who had access to the Companys financial and other relevant information.



|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.



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.



  Previously filed



|(b) |  | Reports on Form 8-K
|--- |  | -------------------



During the first quarter of fiscal 2003, Midas filed one 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



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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:    September 10, 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