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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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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 September 27, 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 Jurisdictionof Incorporation or Organization ) |  | (I.R.S. EmployerIdentification No.)



|1300 Arlington Heights Road, Itasca, Illinois |  | 60143     
|--------------------------------------------- |  | ----------
|(Address of Principal Executive Offices)      |  | (Zip Code)



(630) 438-3000

(Registrants telephone number, including area code)



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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 November 4, 2003 was 15,216,131.



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PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



MIDAS, INC.

CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except for earnings per share)



|                                                       |  | For the quarterended fiscal September |       |   | For the nine monthsended fiscal September |  
|------------------------------------------------------ |  | ------------------------------------- | ----- | - | ----------------------------------------- | -
|                                                       |  | 2003                                  |       |   | 2002                                      |  
|                                                       |  | (13 Weeks)                            |       |   | (13 Weeks)                                |  
|Sales and revenues:                                    |  |                                       |       |   |                                           |  
|Replacement part sales and product royalties           |  | $                                     | 41.6  |   |                                           | $
|Franchise royalties and license fees                   |  |                                       | 15.9  |   |                                           |  
|Company-operated shop retail sales                     |  |                                       | 9.6   |   |                                           |  
|Real estate revenues                                   |  |                                       | 9.1   |   |                                           |  
|Other                                                  |  |                                       | 0.8   |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Total sales and revenues                               |  |                                       | 77.0  |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Cost of sales and revenues:                            |  |                                       |       |   |                                           |  
|Replacement part cost of sales                         |  |                                       | 32.2  |   |                                           |  
|Company-operated shop cost of sales                    |  |                                       | 2.2   |   |                                           |  
|Real estate cost of revenues                           |  |                                       | 5.5   |   |                                           |  
|Warranty expense                                       |  |                                       | 2.7   |   |                                           |  
|Business transformation charges (warranty reserve)     |  |                                       | 5.2   |   |                                           |  
|Business transformation charges (inventory write-down) |  |                                       | 3.9   |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Total cost of sales and revenues                       |  |                                       | 51.7  |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Gross profit                                           |  |                                       | 25.3  |   |                                           |  
|Selling, general, and distribution expenses            |  |                                       | 31.7  |   |                                           |  
|Business transformation charges                        |  |                                       | 6.8   |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Operating income (loss)                                |  |                                       | (13.2 | ) |                                           |  
|Interest expense                                       |  |                                       | (6.8  | ) |                                           |  
|Other income, net                                      |  |                                       | 0.7   |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Income (loss) before income taxes (benefit)            |  |                                       | (19.3 | ) |                                           |  
|Income taxes (benefit)                                 |  |                                       | (7.5  | ) |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Net income (loss)                                      |  | $                                     | (11.8 | ) |                                           | $
|                                                       |  |                                       |       |   |                                           |  
|Earnings (loss) per share:                             |  |                                       |       |   |                                           |  
|Basic                                                  |  | $                                     | (0.76 | ) |                                           | $
|                                                       |  |                                       |       |   |                                           |  
|Diluted                                                |  | $                                     | (0.76 | ) |                                           | $
|                                                       |  |                                       |       |   |                                           |  
|Average number of shares:                              |  |                                       |       |   |                                           |  
|Common shares outstanding                              |  |                                       | 15.1  |   |                                           |  
|Common stock warrants not subject to restriction       |  |                                       | 0.5   |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Shares applicable to basic earnings                    |  |                                       | 15.6  |   |                                           |  
|Equivalent shares on outstanding stock options         |  |                                       |      |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  
|Shares applicable to diluted earnings                  |  |                                       | 15.6  |   |                                           |  
|                                                       |  |                                       |       |   |                                           |  



See notes to condensed
financial statements



1



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MIDAS, INC.

CONDENSED BALANCE SHEETS

(In millions)



|                                                                                                              |  | FiscalSeptember2003 |       |   | FiscalDecember2002 |  
|------------------------------------------------------------------------------------------------------------- |  | ------------------- | ----- | - | ------------------ | -
|                                                                                                              |  | (Unaudited)         |       |   |                    |  
|Assets:                                                                                                       |  |                     |       |   |                    |  
|Current assets:                                                                                               |  |                     |       |   |                    |  
|Cash and cash equivalents                                                                                     |  | $                   | 2.8   |   |                    | $
|Receivables, net                                                                                              |  |                     | 59.0  |   |                    |  
|Inventories, net                                                                                              |  |                     | 50.4  |   |                    |  
|Deferred income taxescurrent                                                                                 |  |                     | 20.9  |   |                    |  
|Other current assets                                                                                          |  |                     | 8.7   |   |                    |  
|                                                                                                              |  |                     |       |   |                    |  
|Total current assets                                                                                          |  |                     | 141.8 |   |                    |  
|Property and equipment, net                                                                                   |  |                     | 138.5 |   |                    |  
|Intangible assets                                                                                             |  |                     | 9.9   |   |                    |  
|Deferred income taxes                                                                                         |  |                     | 33.6  |   |                    |  
|Other assets                                                                                                  |  |                     | 11.0  |   |                    |  
|                                                                                                              |  |                     |       |   |                    |  
|Total assets                                                                                                  |  | $                   | 334.8 |   |                    | $
|                                                                                                              |  |                     |       |   |                    |  
|Liabilities and Equity:                                                                                       |  |                     |       |   |                    |  
|Current liabilities:                                                                                          |  |                     |       |   |                    |  
|Current portion of long-term obligations                                                                      |  | $                   | 1.7   |   |                    | $
|Accounts payable                                                                                              |  |                     | 22.9  |   |                    |  
|Accrued expenses                                                                                              |  |                     | 40.5  |   |                    |  
|                                                                                                              |  |                     |       |   |                    |  
|Total current liabilities                                                                                     |  |                     | 65.1  |   |                    |  
|Long-term debt                                                                                                |  |                     | 115.1 |   |                    |  
|Obligations under capital leases                                                                              |  |                     | 6.7   |   |                    |  
|Finance lease obligation                                                                                      |  |                     | 37.8  |   |                    |  
|Deferred income taxes                                                                                         |  |                     |      |   |                    |  
|Accrued warrantynon-current                                                                                  |  |                     | 33.8  |   |                    |  
|Other liabilities                                                                                             |  |                     | 14.6  |   |                    |  
|                                                                                                              |  |                     |       |   |                    |  
|Total liabilities                                                                                             |  |                     | 273.1 |   |                    |  
|                                                                                                              |  |                     |       |   |                    |  
|Shareholders equity:                                                                                         |  |                     |       |   |                    |  
|Common stock ($.001 par value, 100 million shares authorized; 17.3 million shares issued) and paid-in capital |  |                     | 23.7  |   |                    |  
|Treasury stock, at cost (2.2 million shares and 2.3 million shares)                                           |  |                     | (49.5 | ) |                    |  
|Unamortized restricted stock awards                                                                           |  |                     | (1.4  | ) |                    |  
|Retained income                                                                                               |  |                     | 100.1 |   |                    |  
|Cumulative other comprehensive loss                                                                           |  |                     | (11.2 | ) |                    |  
|                                                                                                              |  |                     |       |   |                    |  
|Total shareholders equity                                                                                    |  |                     | 61.7  |   |                    |  
|                                                                                                              |  |                     |       |   |                    |  
|Total liabilities and equity                                                                                  |  | $                   | 334.8 |   |                    | $
|                                                                                                              |  |                     |       |   |                    |  



See notes to condensed
financial statements.



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MIDAS, INC.

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)



|                                                                                                                          |  | For the ninemonths endedfiscal September |      
|------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | -----
|                                                                                                                          |  | 2003                                     |      
|Cash flows from operating activities:                                                                                     |  |                                          |      
|Net income (loss)                                                                                                         |  | $                                        | (50.9
|Adjustments reconciling net income (loss) to net cash provided by (used in) operating activities:                         |  |                                          |      
|Depreciation and amortization                                                                                             |  |                                          | 12.0 
|Amortization of debt discount and financing fees                                                                          |  |                                          | 4.9  
|Business transformation charges (warranty reserve)                                                                        |  |                                          | 38.5 
|Business transformation charges (inventory write-down)                                                                    |  |                                          | 12.5 
|Business transformation charges                                                                                           |  |                                          | 20.8 
|Cash outlays for business transformation costs                                                                            |  |                                          | (9.7 
|Deferred income taxes                                                                                                     |  |                                          | (34.4
|Changes in assets and liabilities, exclusive of effects of business transformation charges, acquisitions and
dispositions |  |                                          | 21.4 
|                                                                                                                          |  |                                          |      
|Net cash provided by (used in) operating activities                                                                       |  |                                          | 15.1 
|                                                                                                                          |  |                                          |      
|Cash flows from investing activities:                                                                                     |  |                                          |      
|Capital investments                                                                                                       |  |                                          | (1.6 
|Cash paid for acquired businesses                                                                                         |  |                                          | (0.4 
|Proceeds from sales of assets                                                                                             |  |                                          | 9.4  
|                                                                                                                          |  |                                          |      
|Net cash provided by (used in) investing activities                                                                       |  |                                          | 7.4  
|                                                                                                                          |  |                                          |      
|Cash flows from financing activities:                                                                                     |  |                                          |      
|Net decrease in short-term debt                                                                                           |  |                                          |     
|Net decrease in long-term debt                                                                                            |  |                                          | (19.3
|Issuance of stock warrants in connection with refinancing                                                                 |  |                                          | 5.0  
|Cash payments for debt financing fees                                                                                     |  |                                          | (4.8 
|Payment of obligations under capital leases                                                                               |  |                                          | (0.6 
|Net increase (decrease) in finance lease obligation                                                                       |  |                                          | (0.5 
|Cash received from common stock                                                                                           |  |                                          | 0.1  
|Cash paid for treasury shares                                                                                             |  |                                          | (0.1 
|                                                                                                                          |  |                                          |      
|Net cash provided by (used in) financing activities                                                                       |  |                                          | (20.2
|                                                                                                                          |  |                                          |      
|Net change in cash and cash equivalents                                                                                   |  |                                          | 2.3  
|Cash and cash equivalents at beginning of period                                                                          |  |                                          | 0.5  
|                                                                                                                          |  |                                          |      
|Cash and cash equivalents at end of period                                                                                |  | $                                        | 2.8  
|                                                                                                                          |  |                                          |      



See notes to condensed
financial statements.



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MIDAS, INC.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited)

(In millions)



|                                          |  | Common StockAndPaid-in Capital |  |        | Treasury Stock |   |        | UnamortizedRestrictedStock Awards |   |        | RetainedIncome |       |   | ComprehensiveIncome (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                   |  |                               |  |        | (3.0           | ) |        | 0.1                               |   |        |                | 4.4   |   |                            |        
|                                          |  |                                |  |        |                |   |        |                                  
|Stock option transactions                 |  |                               |  |        | (0.2           | ) |        |                                  |   |        |                | 0.3   |   |                            |        
|                                          |  |                                |  |        |                |   |        |                                  
|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 third quarter end 2003             |  | 17.3                           |  | $      | 23.7           |   |        | (2.2                              | ) |        | $              | (49.5 | ) |                            | $      
|                                          |  |                                |  |        |                |   |        |                                   |   |        |                |       |   |                            |        



See notes to condensed
financial statements.



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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 September 27, 2003 (third quarter fiscal 2003) and September 28, 2002 (third quarter fiscal 2002) and of its financial position as
of September 27, 2003. All such adjustments are of a normal recurring nature. The results of operations for the third 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 September 27, 2003 and September 28, 2002 both cover a
39-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 fiscalSeptember |  | For the ninemonths endedfiscal September
|------------------------------------------------ |  | ------------------------------------ |  | ----------------------------------------
|                                                 |  | 2003                                 |  | 2002                                    
|Weighted-average common shares outstanding       |  | 15.1                                 |  | 15.0                                    
|Common stock warrants not subject to restriction |  | 0.5                                  |  |                                        
|                                                 |  |                                      |  |                                         
|Shares applicable to basic earnings              |  | 15.6                                 |  | 15.0                                    
|Effect of dilutive stock options and warrants    |  |                                     |  |                                        
|                                                 |  |                                      |  |                                         
|Shares applicable to diluted earnings            |  | 15.6                                 |  | 15.0                                    
|                                                 |  |                                      |  |                                         
|Potential common share equivalents:              |  |                                      |  |                                         
|Stock options                                    |  | 2.1                                  |  | 1.9                                     
|Warrants subject to restriction                  |  | 0.5                                  |  |                                        
|                                                 |  |                                      |  |                                         
|Total shares excluded                            |  | 2.6                                  |  | 1.9                                     
|                                                 |  |                                      |  |                                         



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 500,000 warrants not subject to return provisions are included in the basic earnings per share calculation. The 500,000 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.



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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 thenine monthsended fiscalSeptember |     
|------------------ |  | --------------------------------------- | ----
|                   |  | 2003                                    |     
|Interest paid      |  | $                                       | 11.7
|Income tax refunds |  |                                         | (6.9
|Income taxes paid  |  |                                         | 1.1 



3.
Inventories



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



|                                  |  | FiscalSeptember2003 |      | FiscalDecember2002
|--------------------------------- |  | ------------------- | ---- | ------------------
|                                  |  | (Unaudited)         |      |                   
|Raw materials and work in process |  | $                   | 2.2  |                   
|Finished goods                    |  |                     | 48.2 |                   
|                                  |  |                     |      |                   
|                                  |  | $                   | 50.4 |                   
|                                  |  |                     |      |                   



4.
Business Transformation Charges



As part of the Companys
ongoing business transformation, the Company has developed and is implementing strategic initiatives that it believes will enhance its long-term competitive position. The Company believes these initiatives will enable it to reduce costs and enhance
sustainable profitability while delivering critical products and services to its customers. These initiatives include the disposition of Parts Warehouse, Inc. (PWI), the closure and re-franchising of certain company-operated shops and the redesign
of the Companys wholesale distribution network. In addition, the Company will continue to reduce its administrative expenses in conjunction with the implementation of these strategic initiatives.



During the second quarter of fiscal 2003, the Company entered into a supply
agreement with AutoZone, Inc. to provide weekly distribution of genuine Midas products and other automotive parts to Midas dealers throughout the U.S. During the third quarter of fiscal 2003, the Company entered into a similar agreement with
Uni-Select Inc. to provide weekly distribution of genuine Midas products and other automotive parts to Midas dealers throughout Canada. Historically, Midas distributed these parts to Midas dealers through regional distribution centers located
throughout North America. As part of these agreements, AutoZone and Uni-Select will also make just-in-time parts delivery available to Midas dealers throughout North America. As a result of these supply agreements, the Company expects to exit the
traditional Midas wholesale parts distribution business in both the U.S. and Canada by the end of fiscal 2003. This transition involves the closing of all but one of Midas existing regional distribution centers and will result in business
transformation charges throughout fiscal 2003 for severance, non-recoverable lease costs, fixed asset write-downs, excess inventory write-downs and reductions in corporate administrative overhead.



During the first nine months of fiscal 2003, the Company recorded business
transformation charges of $71.8 million. The non-cash portion of this charge totals $61.6 million and includes $38.5 million to establish warranty accruals in the U.S. and Canada (as described in Note 7), $12.5 million to write-down wholesale
inventories, $2.7 million to provide an allowance against certain vendor accounts receivable, $3.3 million to write-off fixed assets related to wholesale operations and the disposition of company-operated shops, $2.2 million to write-off goodwill
related to the disposition of company-operated shops, $2.0 million to adjust the value of certain pension assets in Canada as a result of the Companys decision to exit the wholesale distribution business in Canada and $0.4 million of loss on
extinguishment of prior debt. The cash portion of this charge totals $10.2 million and includes $4.2 million for severance and other separation costs, $2.9 million



6



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for non-recoverable lease costs, $1.3 for terminated re-financing efforts, $1.0 million for loss on extinguishment of prior debt, and $0.8 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 orRe-franchiseof CompanyShops |   |      | Redesign ofWholesaleDistributionNetwork |  |   | AdministrativeCosts,Severance andOther Costs |   |  | Total |     
|--------------------------------------------- |  | ----------------- | ---- | - | ------------------------------------- | - | ---- | --------------------------------------- |  | - | -------------------------------------------- | - |  | ----- | ----
|Balance at December 28, 2002                  |  | $                 | 5.2  |   |                                       | $ | 1.4  |                                         |  | $ | 2.0                                          |   |  | $     | 3.2 
|Cash payments                                 |  |                   | (3.3 | ) |                                       |   | (1.4 | )                                       |  |   | (1.2                                         | ) |  |       | (3.8
|Non-cash utilization                          |  |                   | (1.1 | ) |                                       |   |     |                                         |  |   |                                             |   |  |       | (0.1
|2003 business transformation charges          |  |                   | 0.7  |   |                                       |   | 7.5  |                                         |  |   | 60.2                                         |   |  |       | 3.4 
|2003 non-cash business transformation charges |  |                   | (0.2 | ) |                                       |   | (4.1 | )                                       |  |   | (57.0                                        | ) |  |       | (0.3
|                                              |  |                   |      |   |                                       |   |      |                                         |  |   |                                              |   |  |       |     
|Balance at September 27, 2003                 |  | $                 | 1.3  |   |                                       | $ | 3.4  |                                         |  | $ | 4.0                                          |   |  | $     | 2.4 
|                                              |  |                   |      |   |                                       |   |      |                                         |  |   |                                              |   |  |       |     



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 monthly 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, but not limited to, 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 is being amortized over the life of the loan.



7



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The components of debt as of September 27, 2003 and December 28, 2002 were as follows:



|                                 |  | September 27,2003 |       |   | December 28,2002
|-------------------------------- |  | ----------------- | ----- | - | ----------------
|Revolving credit facility        |  | $                 |      |   |                 
|Unsecured debt                   |  |                   |      |   |                 
|Term loan A                      |  |                   | 82.0  |   |                 
|Term loan B                      |  |                   | 36.5  |   |                 
|Unamortized debt discount        |  |                   | (3.4  | ) |                 
|                                 |  |                   |       |   |                 
|Total debt                       |  |                   | 115.1 |   |                 
|Less amounts due within one year |  |                   |      |   |                 
|                                 |  |                   |       |   |                 
|Long-term debt                   |  | $                 | 115.1 |   |                 
|                                 |  |                   |       |   |                 



Financing fees of $7.6
million paid in connection with the new loan facilities were capitalized and are being amortized over the term of the new loan agreements. In addition, the Company recorded a $1.4 million loss in the first quarter of fiscal 2003 related to the
extinguishment of the prior debt. This amount is included in business transformation charges in the consolidated statements of operations for the nine months ended September 27, 2003.



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 (loss) and earnings (loss) per share would equal 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.



|                                                                                            |  | For the quarterended fiscalSeptember |      
|------------------------------------------------------------------------------------------- |  | ------------------------------------ | -----
|                                                                                            |  | 2003                                 |      
|Net income (loss)                                                                           |  |                                      |      
|As reported                                                                                 |  | $                                    | (11.8
|Plus: stock-based compensation expense included in reported net income (loss), net of taxes |  |                                      | 0.1  
|Less: fair value impact of employee stock compensation, net of taxes                        |  |                                      | (1.0 
|                                                                                            |  |                                      |      
|Pro forma                                                                                   |  | $                                    | (12.7
|                                                                                            |  |                                      |      
|Basic earnings (loss) per share                                                             |  |                                      |      
|As reported                                                                                 |  | $                                    | (0.76
|Pro forma                                                                                   |  |                                      | (0.82
|Diluted earnings (loss) per share                                                           |  |                                      |      
|As reported                                                                                 |  | $                                    | (0.76
|Pro forma                                                                                   |  |                                      | (0.82



8



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|                                                                                            |  | For the ninemonths endedfiscal September |      
|------------------------------------------------------------------------------------------- |  | ---------------------------------------- | -----
|                                                                                            |  | 2003                                     |      
|Net income (loss)                                                                           |  |                                          |      
|As reported                                                                                 |  | $                                        | (50.9
|Plus: stock-based compensation expense included in reported net income (loss), net of taxes |  |                                          | 0.2  
|Less: fair value impact of employee stock compensation, net of taxes                        |  |                                          | (1.9 
|                                                                                            |  |                                          |      
|Pro forma                                                                                   |  | $                                        | (52.6
|                                                                                            |  |                                          |      
|Basic earnings (loss) per share                                                             |  |                                          |      
|As reported                                                                                 |  | $                                        | (3.31
|Pro forma                                                                                   |  |                                          | (3.42
|Diluted earnings (loss) per share                                                           |  |                                          |      
|As reported                                                                                 |  | $                                        | (3.31
|Pro forma                                                                                   |  |                                          | (3.42



7.
Warranty



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



Prior to fiscal 2003, the Company had not historically maintained an accrual for estimated future warranty claims related to its lifetime guarantee of exhaust and brake products. Instead, the Company recorded expenses
related to these product warranties as warranty claims were incurred. 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 exceeded the cost
of reimbursement to the franchisee. As a result of the outsourcing of the U.S. Midas distribution function to AutoZone, Inc., as described in Note 4, Midas no longer generates sufficient gross profit on a warranty claim to offset the average
warranty claim reimbursement in the U.S. Consequently, the Company recorded a charge of $33.3 million in the second quarter of fiscal 2003 to reflect its estimated liability associated with outstanding warranties in the U.S. Similarly, as a result
of the outsourcing of the Canadian Midas distribution function to Uni-Select Inc., a charge of $5.2 million was recorded in the third quarter of fiscal 2003 to reflect the Companys estimated liability associated with outstanding warranties in
Canada. On a going forward basis, Midas will accrue for the expected future cost of warranty redemptions at the time of the original installation based on the method described above. This treatment will not affect cash flow associated with warranty
redemptions in either the U.S or Canada.



Warranty expense is
included in cost of sales and revenues in the condensed statements of operations.



Year-to-date warranty activity through September 27, 2003 is summarized as follows (in millions):



|Accrued warranty at beginning of period                      |  | $ | 0.5  |  
|------------------------------------------------------------ |  | - | ---- | -
|Warranty expense                                             |  |   | 8.9  |  
|Business transformation charge                               |  |   | 38.5 |  
|Warranty credit issued to franchisees (warranty claims paid) |  |   | (8.9 | )
|                                                             |  |   |      |  
|Accrued warranty at end of period                            |  |   | 39.0 |  
|Less current portion (included in accrued expenses)          |  |   | 5.2  |  
|                                                             |  |   |      |  
|Accrued warrantynon-current                                 |  | $ | 33.8 |  
|                                                             |  |   |      |  



9



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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 $2.3 million in the first
nine months of fiscal 2003.



The Companys operating
activities generated net cash of $15.1 million during the first nine months of fiscal 2003 compared to $11.7 million of cash used in the first nine months of fiscal 2002. The year-over-year improvement in cash flow from operations of $26.8 million
was primarily due to a $57.7 million decrease in net income and a $37.6 million increase in deferred tax assets, offset by a $59.1 million increase in business transformation costs (net of payments), a $4.4 million increase in amortization of debt
discount and financing fees, and changes in assets and liabilities requiring $58.9 million less cash than the prior year. Changes in assets and liabilities generated $21.4 million of cash in fiscal 2003 compared to a use of $37.5 million in fiscal
2002. The $21.4 million source of cash in fiscal 2003 was primarily due to a reduction in the inventory required to support the smaller wholesale parts distribution operation, partially offset by a normal seasonal increase in accounts receivable and
a reduction in accounts payable. The $37.5 million use of cash in fiscal 2002 was primarily due to an increase in accounts receivable as result of seasonal factors, growth in wholesale distribution receivables and inventories, and reductions in
accrued expenses and accounts payable.



Investing activities
generated $7.4 million in cash during the first nine months of fiscal 2003 compared to using $9.1 million in cash during the comparable nine month period one year ago. Fiscal 2003 investing activities primarily consisted of $1.6 million in systems
development projects and other maintenance capital expenditures, and $9.4 million in cash generated as the result of asset sales related to the Companys business transformation process. During the first nine months of fiscal 2003, the Company
generated cash through a sale and leaseback of the Companys Taunton distribution facility, the sale of certain Parts Warehouse, Inc. (PWI) locations and the re-franchising of certain company-operated shops. 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 used in financing activities was $20.2 million in the first nine months of fiscal 2003, compared to net cash
generated of $21.8 million in the first nine months 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 $20.4 million and paid $4.8 million for debt financing fees. In fiscal 2002, the cash was primarily generated through an increase in net borrowings, including the
incurrence of a finance lease obligation related to the sale and leaseback of 77 owned properties. 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 has been implementing certain
business transformation initiatives in order to improve liquidity and reduce interest expense. These initiatives include the disposition of PWI, the closing and re-franchising of certain company-operated shops, and the closing of all but one
wholesale distribution center. The Company expects that the implementation of these initiatives will be substantially complete by fiscal year-end 2003. The Company has generated increased cash flow from these actions and expects to further improve
cash flow and reduce debt in the fiscal fourth quarter as a result of the liquidation of wholesale 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 monthly 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.



10



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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, but not limited to, 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.



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 that it believes will
enhance its long-term competitive position. The Company believes these initiatives will enable it to 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. Furthermore, the implementation of the Companys
strategic initiatives has resulted in the Company recording substantial business transformation charges to reflect the write-down of assets, the disposition of lease agreements, severance costs, and other related expenses. This transformation
process is expected to be substantially complete by year-end fiscal 2003, and it will result in additional business transformation charges in the fiscal fourth quarter.



As of the end of the third quarter of fiscal 2003, the Company had sold or closed all of the 77 PWI locations it operated as
of the beginning of the fiscal year. The Company has disposed of 57 of the 70 stand-alone store leases primarily through lease buyouts or assignments, and has disposed of all the vehicles associated with the operation of the PWI business.



During the first nine months of fiscal 2003, the Company
closed 14 company-operated shops and re-franchised 24 company-operated shops, reducing the number in operation from 111 to 73. The Company has no current plans to close or re-franchise additional company-operated shops in fiscal 2003.



On April 3, 2003, the Company entered into a supply agreement with AutoZone,
Inc. to provide Midas dealers in the U.S. with the distribution of genuine Midas products and other automotive parts on a weekly basis comparable to the distribution service currently provided by Midas traditional wholesale distribution
business. AutoZone will also serve the just-in-time parts supply requirements of Midas dealers in the U.S. Upon the transition to this supply arrangement, which is expected to be completed by year-end, the Company will no longer operate the
traditional Midas wholesale distribution business in the U.S., and all but one distribution center in the U.S. will be closed.



Finally, on July 11, 2003, the Company announced that it entered into a supply agreement with Uni-Select Inc. to provide weekly distribution of genuine
Midas products and other automotive parts on a weekly basis to Midas dealers throughout Canada. The agreement with Uni-Select is similar to the arrangement Midas has with AutoZone in the U.S. Upon the transition to this supply arrangement, which is
expected to be completed by year-end, the Company will no longer operate the traditional Midas wholesale distribution business in Canada, and all distribution centers in Canada will be closed or transferred to Uni-Select. In addition, the Company
has appointed Uni-Select Inc. as its exclusive distributor of IPC branded exhaust products in Canada. Midas will supply IPC branded exhaust products to Uni-Select for distribution to



11



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non-Midas customers throughout Canada. Midas will continue to distribute IPC branded exhaust products to non-Midas customers in the U.S.



Third Quarter Fiscal 2003 Compared with Third Quarter Fiscal 2002



The following is a summary of the Companys sales and revenues for the
third quarter of fiscal 2003 and 2002: ($ millions)



|                                             |  | 2003 |      | Percentto Total |       |   | 2002 |   | Percentto Total | 
|-------------------------------------------- |  | ---- | ---- | --------------- | ----- | - | ---- | - | --------------- | 
|Replacement part sales and product royalties |  | $    | 41.6 |                 | 54.0  | % |      | $ | 47.8            | 
|Franchise royalties and license fees         |  |      | 15.9 |                 | 20.7  |   |      |   | 16.0            | 
|Company-operated shop retail sales           |  |      | 9.6  |                 | 12.5  |   |      |   | 13.2            | 
|Real estate revenues                         |  |      | 9.1  |                 | 11.8  |   |      |   | 9.1             | 
|Other                                        |  |      | 0.8  |                 | 1.0   |   |      |   | 0.3             | 
|                                             |  |      |      |                 |       |   |      |   |                 | 
|Total sales and revenues                     |  | $    | 77.0 |                 | 100.0 | % |      | $ | 86.4            | 
|                                             |  |      |      |                 |       |   |      |   |                 | 



Sales and revenues for
the third quarter of fiscal 2003 decreased $9.4 million or 10.9% from the third quarter of fiscal 2002 to $77.0 million.



Replacement part sales decreased $6.2 million to $41.6 million from $47.8 million in the third quarter of fiscal 2002. Replacement part sales through the
Companys traditional wholesale distribution channel increased 21.8% driven primarily by the sale of wholesale inventory in connection with the Companys recent agreement to outsource wholesale parts distribution to AutoZone, Inc. in the
U.S. Replacement part sales through the Companys PWI wholesale distribution channel, which served the just-in-time replacement parts needs of Midas dealers and customers outside the Midas system, decreased 93.0%, reflecting a large reduction
in the number of PWI stores in operation during the quarter from the prior year. As of September 27, 2003, all PWI stores had been closed compared to 76 stores in operation at the end of the third quarter in fiscal 2002.



Within the retail auto service business, franchise royalties and license fees
were down 0.6% from the third quarter of 2002. While comparable shop sales at retail were approximately flat compared to the prior year, a reduction in the Midas system total shop count from the prior years third quarter accounted for the
slight overall revenue decline. Revenues from company-operated shops declined $3.6 million, or a decrease of 27.3% from the same period in fiscal 2002. The sales decrease primarily reflects a decline in comparable shop sales of 1.9%, the closure of
14 under-performing shops during the first nine months and the re-franchising of 24 shops during the second and third quarters of fiscal 2003. The number of company-operated shops in operation at September 27, 2003 declined to 73, compared to 110
shops at the end of the third quarter in fiscal 2002. Revenue from real estate rentals was approximately flat to the same quarter in fiscal 2002.



The Companys gross profit margin, including business transformation charges of $9.1 million, decreased from 52.0% in the third quarter of fiscal
2002 to 32.9% in the third quarter of fiscal 2003. The Companys gross profit margin excluding business transformation charges decreased from 52.0% in the third quarter of fiscal 2002 to 44.7% in the third quarter of fiscal 2003. This decline
was primarily due to the Companys sale of certain wholesale inventory at cost in connection with the outsourcing of U.S. Midas distribution to AutoZone, Inc. and the liquidation of inventory in the PWI distribution channel. The increased
proportion of total sales related to franchise royalties, and royalties received on the sale of replacement parts by AutoZone to Midas dealers in the U.S., helped to somewhat offset the negative margin impact of sales related to the wholesale
inventory reduction process. Lower margins in real estate primarily reflect a somewhat higher proportion of revenues derived from lower margin leases.



During the third quarter of fiscal 2003, the Company entered into a supply agreement with Uni-Select Inc. to provide weekly distribution of genuine Midas
products and other automotive parts to Midas dealers throughout Canada. The agreement with Uni-Select is similar to the supply arrangement Midas entered into during the second fiscal quarter with AutoZone to supply Midas dealers in the U.S. As a
result of this outsourcing arrangement, which is expected to be completed by fiscal year-end, the Company will no longer operate the traditional Midas wholesale distribution business in Canada, and all distribution centers in Canada will be closed
or transferred to Uni-Select. During the third quarter of fiscal 2003, the Company recorded an inventory write-down of $3.9 million to reduce its wholesale distribution inventory to its expected net realizable value. This write-down was recorded as
a component of cost of sales.



12



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The Company recorded an additional business transformation charge in cost of sales during the third
quarter of fiscal 2003 to establish a $5.2 million accrual for estimated future warranty claims. This accrual relates to warranties issued to customers in Canada for certain exhaust and brake parts that carry a lifetime warranty. The Company has not
historically maintained an accrual for estimated future warranty claims related to its lifetime guarantee of exhaust and brake products in Canada. Instead, the Company has historically recorded expenses related to these product warranties as
warranty claims were incurred. 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 exceeded the cost of reimbursement to the franchisee. As a
result of the outsourcing of the wholesale distribution function in Canada to Uni-Select Inc., Midas will no longer generate sufficient gross profit on a warranty claim to offset the average warranty claim reimbursement in Canada. Consequently, the
Company recorded a $5.2 million charge to reflect its estimated liability associated with outstanding warranties in Canada. The Company recorded a similar charge in the fiscal second quarter to reflect the Companys estimated liability
associated with outstanding warranties in the U.S. as a result of the Companys outsourcing of its Midas distribution function in the U.S. to AutoZone, Inc. On a going forward basis, in the U.S and Canada, Midas will 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.



Selling, general and distribution expenses for the third quarter of fiscal 2003 decreased $4.7 million, or 12.9% from 2002 to $31.7 million. Lower
operating expenses resulted from fewer PWI stores and company-operated shops in operation and a reduction in payroll expense due to administrative headcount reductions made in association with the Companys business transformation process.
However, these savings were partially offset by incremental expenses incurred during the sale and closure of PWI store and company-operated shop locations, and higher distribution costs related to the liquidation of inventory.



During the third quarter of fiscal 2003, the Company recorded a charge of
$6.8 million related to the Companys ongoing business transformation process. The Company recorded $2.5 million in charges to reflect the write-down of fixed assets and goodwill, and $0.9 million to accrue for the cost of certain building and
equipment leases associated with the closure of distribution centers and the closure and re-franchising of certain company-operated shops. Charges for severance and other separation costs of $1.4 million were recorded during the quarter as a result
of the closure of certain distribution centers, PWI store and company-operated shop locations, and the termination of administrative support for closed operations. Finally, the Company recorded a $2.0 million charge to reflect an adjustment to the
value of certain pension assets in Canada as a result of the Companys decision to exit the wholesale distribution business in Canada. The Company will record additional business transformation charges in the fourth quarter of fiscal 2003 as
its business transformation process continues. This may include goodwill impairment charges related to company-operated shops should the financial performance of these shops continue to fall below expectations.



As a result of the above changes, operating income declined $17.4 million
from income of $4.2 million in the third quarter of 2002 to a loss of $13.2 million in the third quarter of 2003. Excluding the impact of the above described business transformation charges of $15.9 million, operating income in the third quarter of
fiscal 2003 would have been $2.7 million.



Interest expense
increased from $3.0 million in the third quarter of fiscal 2002 to $6.8 million in the third quarter of fiscal 2003 as a result of higher interest rates compared to the prior year, higher debt levels, and the amortization of fees associated with the
Companys financing agreement completed on March 27, 2003.



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



As a result of the above items, net income decreased $12.9 million from income of $1.1 million in the third quarter of 2002 to a loss of $11.8 million in
the third quarter of 2003.



13



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Nine Months Ended Fiscal September 2003 Compared with Nine Months Ended Fiscal September 2002



The following is a summary of the Companys sales and revenues for the
nine months ended fiscal September 2003 and 2002, respectively: ($ millions)



|                                             |  | 2003 |       | Percentto Total |       |   | 2002 |   | Percentto Total | 
|-------------------------------------------- |  | ---- | ----- | --------------- | ----- | - | ---- | - | --------------- | 
|Replacement part sales and product royalties |  | $    | 122.0 |                 | 53.2  | % |      | $ | 141.1           | 
|Franchise royalties and license fees         |  |      | 45.6  |                 | 19.9  |   |      |   | 46.9            | 
|Company-operated shop retail sales           |  |      | 32.5  |                 | 14.1  |   |      |   | 41.0            | 
|Real estate revenues                         |  |      | 27.0  |                 | 11.8  |   |      |   | 28.0            | 
|Other                                        |  |      | 2.3   |                 | 1.0   |   |      |   | 1.2             | 
|                                             |  |      |       |                 |       |   |      |   |                 | 
|Total sales and revenues                     |  | $    | 229.4 |                 | 100.0 | % |      | $ | 258.2           | 
|                                             |  |      |       |                 |       |   |      |   |                 | 



Sales and revenues for
the first nine months of fiscal 2003 decreased $28.8 million or 11.1% from the first nine months of fiscal 2002 to $229.4 million.



Replacement part sales decreased $19.1 million to $122.0 million from $141.1 million in the first nine months of fiscal 2002. Replacement part sales
through the Companys traditional wholesale distribution channel increased 6.1%, primarily driven by the sale of wholesale inventory in connection with the Companys recent agreement to outsource wholesale parts distribution to AutoZone,
Inc. in the U.S. Replacement part sales through the Companys PWI wholesale distribution channel, which served the just-in-time replacement parts needs of Midas dealers and customers outside the Midas system, decreased 59.2%, reflecting a large
reduction in the number of PWI stores in operation during the first nine months from the prior year. As of September 27, 2003, all PWI stores had been closed compared to 76 stores in operation at the end of the third quarter in fiscal 2002.



Within the retail auto service business, franchise royalties
and license fees were down 2.8% from the first nine months of 2002. The overall decline in revenue was primarily due to a comparable shop sales decline of less than 1% and a reduction in the total shop count of the Midas system from the prior year.
Revenues from company-operated shops declined $8.5 million, or a decrease of 20.7% from the first nine months of fiscal 2002. The sales decrease primarily reflects a decline in comparable shop sales of 8.9%, the closure of 14 under-performing shops
during the first nine months and the re-franchising of 24 shops during the second and third quarters of fiscal 2003. The number of company-operated shops in operation at September 27, 2003 declined to 73, compared to 110 shops at the end of the
third quarter in fiscal 2002. Revenues from real estate rentals declined 3.6% primarily due to reduced rental revenue on certain sales-based rental agreements and lower revenue resulting from Midas dealer shop closures.



The Companys gross profit margin, including business transformation
charges of $51.0 million, decreased from 51.0% in the first nine months of fiscal 2002 to 26.1% in the first nine months of fiscal 2003. Excluding the effects of business transformation charges, total gross profit margin decreased to 48.3% in the
first nine months of fiscal 2003 from 51.0% in the first nine months of fiscal 2002. This decline was primarily due to the Companys sale of certain wholesale inventory at cost in connection with the outsourcing of U.S. Midas distribution to
AutoZone, Inc. and the liquidation of inventory in the PWI distribution channel. The increased proportion of total sales related to franchise royalties, and royalties received on the sale of replacement parts by AutoZone to Midas dealers in the
U.S., helped to partially offset the negative margin impact of sales related to the wholesale inventory reduction process. Lower margins in real estate primarily reflect reduced rental income on certain sales-based rental agreements as well as
reduced rental revenue from Midas dealers due to shop closures, without a decline in Midas third party rental expense.



As noted earlier, during the second and third quarters of fiscal 2003, the Company entered into supply agreements with AutoZone, Inc. and Uni-Select Inc.,
respectively, to provide weekly distribution of genuine Midas products and other automotive parts to Midas dealers throughout the U.S. and Canada. As a result of these outsourcing arrangements, Midas will close all but one of its existing regional
distribution centers in the U.S and Canada, and will exit the traditional Midas wholesale parts distribution business in North America. During the first nine months of fiscal 2003, the Company recorded inventory write-downs of $12.5 million to
reduce its wholesale distribution inventory in the U.S and Canada to its expected net realizable value. These write-downs were recorded as a component of cost of sales.



14



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The Company recorded additional business transformation charges in cost of sales during the second and
third quarters of fiscal 2003 to establish a $38.5 million accrual for estimated future warranty claims. This accrual relates to warranties issued to customers in the U.S. and Canada for certain exhaust and brake parts that carry a lifetime
warranty. The Company has not historically maintained an accrual for estimated future warranty claims related to its lifetime guarantee of exhaust and brake products. Instead, the Company has historically recorded expenses related to these product
warranties as warranty claims were incurred. 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 exceeded the cost of reimbursement to the
franchisee. As a result of the outsourcing of the Midas distribution function to AutoZone, Inc. in the U.S. and Uni-Select Inc. in Canada, Midas will no longer generate sufficient gross profit on a warranty claim to offset the average warranty claim
reimbursement. Consequently, the Company recorded charges totaling $38.5 million to reflect its estimated liability associated with outstanding warranties in the U.S. and Canada. On a going forward basis, Midas will 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.



Selling, general and distribution expenses for the first nine months of fiscal 2003 decreased $3.2 million, or 2.9% from 2002 to $105.5 million. In the
first nine months 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 $6.2 million in the first nine months of
fiscal 2003 compared to fiscal 2002. Lower operating expenses resulted from fewer PWI stores and company-operated shops in operation and a reduction in payroll expense due to administrative headcount reductions made in association with the
Companys business transformation process. However, these savings were partially offset by incremental expenses incurred during the sale and closure of PWI store and company-operated shop locations, and higher distribution costs related to the
liquidation of inventory. Additionally, the Company experienced higher administrative expenses for workers compensation, pension expense and casualty insurance during the first nine months of 2003.



During the first nine months of fiscal 2003, the Company recorded a charge of
$20.8 million related to the Companys ongoing business transformation process. The Company recorded $5.5 million in charges to reflect the write-down of fixed assets and goodwill, and $2.9 million to accrue for the cost of certain building and
equipment leases associated with the closure of distribution centers and the closure and re-franchising of certain company-operated shops. Charges for severance and other separation costs of $4.2 million were recorded during the first nine months as
a result of the closure of certain distribution centers, PWI store and company-operated shop locations, and the termination of administrative support for closed operations. The Company also recorded a $2.7 million charge to provide an allowance
against the carrying value of outstanding vendor receivables and a $2.0 million charge to reflect an adjustment to the value of certain pension assets in Canada as a result of the Companys decision to exit the wholesale distribution business
in Canada. Finally, the Company incurred charges of $2.7 million related to a terminated refinancing effort and the extinguishment of prior debt and $0.8 million in other charges.



The Company will record additional business transformation charges in the fourth quarter of fiscal 2003 as its business
transformation process continues. This may include goodwill impairment charges related to company-operated shops should the financial performance of these shops continue to fall below expectations.



As a result of the above changes, operating income declined $85.2 million
from income of $18.7 million in the first nine months of 2002 to a loss of $66.5 million in the first nine months of 2003. Excluding the impact of the above described business transformation charges of $71.8 million, operating income in the first
nine months of fiscal 2003 would have been $5.3 million.



Interest expense increased from $8.4 million in the first nine months of 2002 to $18.4 million in the first nine months of 2003 as a result of higher interest rates compared to the prior year, higher debt levels, and the amortization of
fees associated with the Companys financing agreement completed on March 27, 2003.



The Companys effective tax rate was 38.9% in the first nine months of both fiscal 2002 and fiscal 2003.



As a result of the above items, net income decreased $57.7 million from income of $6.8 million in the first nine months of 2002 to a loss of $50.9 million
in the first nine months of 2003.



15



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CRITICAL ACCOUNTING POLICIES



In preparing the condensed 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.



Valuation of Warranty
Liabilities



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



Prior to fiscal 2003, the Company had not maintained an accrual for estimated future warranty claims related to its lifetime guarantee of exhaust and brake products. Instead, the Company recorded expenses related to
these product warranties as warranty claims were incurred. 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 exceeded the cost of
reimbursement to the franchisee. As a result of the fiscal 2003 outsourcing of the Midas distribution function to AutoZone, Inc. in the U.S., and Uni-Select Inc. in Canada, Midas no longer generates sufficient gross profit on a warranty claim to
offset the average warranty claim reimbursement. Consequently, the Company recorded charges during fiscal 2003 to reflect its estimated liability associated with outstanding warranties in Canada and the U.S. On a going forward basis, Midas will
accrue for the expected future cost of warranty redemptions at the time of the original installation based on the method described above. This treatment will not affect cash flow associated with warranty redemptions in either the U.S or Canada.



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



16



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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.



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.



Deferred Income Taxes



In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the
deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences at September 27, 2003. The amount of the deferred tax asset considered realizable, however,
could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. In the event that management determines the Company would not be able to realize all or part of the net deferred tax assets in the
future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. As of September 27, 2003, no valuation allowance was recorded.



17



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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.



On May 15, 2003, the FASB issued SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. The provisions of the Statement change the classification of certain freestanding financial instruments that are now classified as equity.
Generally, the Statement is effective for financial instrument arrangements entered into or modified after May 31, 2003. The adoption of SFAS 150 did not have a material effect on the financial position, results of operations, or cash flows of the
Company.



In January 2003, the FASB issued Interpretation No.
46, Consolidation of Variable Interest Entities, an interpretation of ARB No. 51 (FIN 46). FIN 46 addresses the consolidation of entities whose equity holders have either (a) not provided sufficient equity at risk to allow
the entity to finance its own activities or (b) do not possess certain characteristics of a controlling financial interest. FIN 46 requires the consolidation of these entities, known as variable interest entities (VIEs), by the
primary beneficiary of the entity. The primary beneficiary is the entity, if any, that is subject to a majority of the risk of loss from the VIEs activities, entitled to receive a majority of the VIEs residual returns, or both. FIN 46
applies immediately to variable interests in VIEs created or obtained after January 31, 2003. As amended by FASB Staff Position (FSP) No. FIN 46-6, FIN 46 is effective for variable interests in a VIE created before February 1, 2003 at
the end of the first interim or annual period ending after December 15, 2003 (the end of fiscal 2003, January 3, 2004, for the Company). FIN 46 requires certain disclosures in financial statements issued after January 31, 2003, if it is reasonably
possible that the Company will consolidate or disclose information about variable interest entities when FIN 46 becomes effective.



As of the date of this filing, the Company understands the FASB is in the process of modifying and/or clarifying certain provisions of FIN 46.
Additionally, certain FSPs relating to FIN 46 are being deliberated. These modifications and FSPs, when finalized, could impact the Companys analysis of the applicability of FIN 46 to entities that are franchisees of Midas. The Company is
aware of certain interpretations by some parties of the provisions of FIN 46, given its continuing evolution, which could have applicability when certain conditions exist that are not representative of a typical franchise relationship. These
conditions include the franchisor possessing an equity interest in or providing significant levels of financial support to a franchisee. We continue to monitor and analyze developments regarding FIN 46 and its applicability to franchise
relationships. At this time, we cannot determine the impact of FIN 46, if any, on the Companys financial statements.



18



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FORWARD LOOKING STATEMENTS



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



The Companys results of operations and the
forward-looking statements could be affected by, among others things: general economic conditions in the markets in which the Company operates; economic developments that have a particularly adverse effect on one or more of the markets served by the
Company; the ability to execute managements internal operating plans; the timing and magnitude of capital expenditures; the Companys ability to access debt and equity markets; economic and market conditions in the U.S. and worldwide;
currency exchange rates; changes in consumer spending levels and demand for new products and services; 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, as amended.



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.



19



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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
|--- | --------



|4.22 | Second Amendment to Rights Agreement, dated as of November 11, 2003, between Midas, Inc. and EquiServe Trust  Company, N.A.
|---- | ---------------------------------------------------------------------------------------------------------------------------

|10.25 | Amendment to Agreement for Strategic Alliance and License Agreement dated as of March 14, 2003, by and between Midas International Corporation and Magneti Marelli Services S.p.A.,
which amends the Agreement for Strategic Alliance and License Agreement dated as of October 1, 1998, between Midas International Corporation and Magneti Marelli S.p.A. (incorporated by reference to Exhibit 2.1 to the Midas, Inc. Quarterly Report of
Form 10-Q for the quarterly period ended September 26, 1998) (File No. 001-13409).
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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.
|---- | ----------------------------



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



During the third quarter of fiscal 2003, Midas furnished the Securities and Exchange Commission (SEC) a Current Report on Form

8-K dated August 11, 2003, reporting Midas second quarter fiscal 2003 earnings under Item 12  Results of Operations and Financial Condition, and filed with the SEC a Current Report on Form 8-K dated August 12, 2003, reporting
the election of Diane L. Routson to the Board of Directors of Midas under Item 5  Other Events and Regulation FD Disclosure.



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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: November 11, 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                



21