# Dear Fellow Shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-cyclical-auto-parts/NASDAQ_MNRO_2021/NASDAQ_MNRO_2021.mmd` · pages 7-13_

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Dear Fellow Shareholders

Since I joined Monro in April, I have spent much of my time traveling to our stores, getting to know our Teammates and understanding our customers' vehicle needs. I can unequivocally say that this is a tremendous time to be part of Monro. The depth of talent across the organization and the guidance of our strong senior leadership team were instrumental in driving the business forward in fiscal 2021. As a leading front-line service organization, our go-forward plan will be grounded in our commitment to our customers and Teammates with a renewed focus on in-store execution. With a scalable platform, Monro is also uniquely positioned to continue to grow through strategic acquisitions and investments in greenfield locations. Importantly, we remain steadfast on driving strong cash flow to fuel future growth.

## Keeping Customers on the Road During an Unprecedented Year

While we experienced an unprecedented year, as an essential business, Monro continued to operate throughout the COVID-19 pandemic to keep America's frontline workers on the road. Our team quickly adjusted our operations to ensure the health and safety of our customers and Teammates across all facets of our business. Although many aspects of the pandemic were beyond our control, we never lost sight of our key strategic priorities and accelerated our Monro.Forward initiatives so that we could emerge from the pandemic stronger than before.

## Accelerating Monro.Forward Initiatives

We continued to advance our Monro.Forward initiatives, centered around our commitment to operational excellence as a best-in-class service organization. Throughout fiscal 2021, we successfully transformed approximately 150 stores through our rebranding and reimagining initiative, as well as completed the rollout of our digital phone system and other in-store technological improvements. With the full support of our Board of Directors, we will continue Monro's growth and transformation strategy and focus on bringing our Monro.Forward initiatives to life in every store for every customer and for every Teammate.

![](images/7_0.jpg)

## Advancing Monro.Forward Responsibly

Over the past year, Monro's leadership team has made significant progress in formalizing and advancing our corporate responsibility initiatives and transparency. Under the leadership of our Executive Vice President - Chief Legal Officer, Maureen Mulholland, Monro recently published our inaugural Corporate Responsibility Report on the Corporate Responsibility section of our corporate website. In alignment with our Company core values, our corporate responsibility strategy focuses on integrating Environmental, Social and Governance (ESG) factors into long-term decision making and strategy. This includes fostering diversity, equity, and inclusion; enhancing Teammate engagement; making a positive impact within the communities where we live and operate and being good stewards of the environment. I recognize that our ESG journey is ongoing and am committed and excited to work with our senior leaders to build on the great work that has already been done to continue to drive Monro.Forward responsibly.

## A Look Back at Fiscal 2021

![](images/7_1.jpg)

$1.126B

in sales

![](images/7_2.jpg)

$185M

Generated record cash flow

![](images/7_3.jpg)

Acquisitions completed and announced in fiscal 2021 represent a total of

$65M
in annualized sales

![](images/7_4.jpg)

~150
Stores transformed
in key markets

![](images/7_5.jpg)

$30M

Returned in cash to shareholders through dividends

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## Enhancing Financial Position

During fiscal 2021, we also focused on strengthening our financial position and bolstering our liquidity. The remarkable efforts of our team to drive variable margin improvement and targeted fixed cost reductions led to record operating cash flow of \(185 million. Our steadfast commitment to driving strong cash flow gives us ample flexibility to continue implementing our strategic growth initiatives as well as pursuing attractive acquisition opportunities to deliver long-term value for our shareholders.

## Expanding Geographic Presence in the Western Region

Strategic acquisitions remain a key pillar of Monro's growth strategy. Over the past year, we continued to expand our geographic presence in the dynamic Western region, with the acquisition of 17 stores in Southern California, and most recently 30 Mountain View Tire & Service stores in the Los Angeles area. Combined, these acquisitions represent approximately $65 million in expected annualized sales. Over the last five years, Monro has successfully entered seven new states, adding 262 store locations and approximately $411 million in annualized revenue. Looking forward, we are excited by our growth prospects in the Western region and are well positioned to take advantage of the many attractive consolidation opportunities in our fragmented industry. In addition, we plan on strategically opening greenfield locations to accelerate our growth in attractive markets.

## Driving Long-term Shareholder Value

In closing, fiscal 2021 was an unprecedented year for Monro. The Company continued to accelerate its strategic growth initiatives, strengthened its financial position, and returned $30 million to shareholders. I am confident in our path forward and believe our strong focus on operational execution will drive long-term value for our shareholders.

## Looking Ahead

Monro has made remarkable progress in our transformation journey during fiscal 2021, and I believe these accomplishments will be instrumental to our success in the coming year and beyond. As we head into fiscal 2022, we are encouraged by the pace of the economic recovery and are seeing more customers take to the road. We have a strong foundation to build upon and an exceptional team in place ensuring that we capitalize on the opportunities ahead. The continued dedication of our valued Teammates and our strong commitment to providing a five-star customer experience will remain critical to our success.

On behalf of the Board of Directors and the Senior Leadership Team, I would like to thank you for your continued support of Monro. I look forward to speaking with you at our annual meeting on August 17, 2021.

Sincerely,

![](images/8_0.jpg)

Michael T. Broderick

President and Chief Executive Officer

Monro, Inc.

![](images/8_1.jpg)