MONRO INC

Other Information

Store Closure Plan

On May 23, 2025, following an evaluation of market segmentation and demographic data specific to geographic areas where our stores are located, our Board of Directors approved the Store Closure Plan. As a result, we plan to close 145 underperforming Company-operated retail stores in the first quarter of fiscal 2026 that we have identified to have failed to maintain an acceptable level of profitability. The Store Closure Plan is part of our performance improvement plan intended to enhance operations, drive profitability, and increase operating income and total shareholder returns. We believe the Store Closure Plan is necessary to improve our profitability by reducing fixed costs in stores that have historically underperformed our other stores.

Under the Store Closure Plan, we expect to terminate approximately 500 employees in the underperforming stores. Where possible, impacted employees will be offered alternative roles or the opportunity to apply for open positions in other Company-operated stores. We expect to incur total expenses ranging from approximately $10 to $15 millionof store closing costsas part of the Store Closure Plan. The Company expects to incur the majority of the expenses related to store closure costs during the fiscal quarter ending June 28, 2025.

We recorded $20.8 million in store impairment costs in fiscal 2025 related to these stores as part of our normal long-lived asset impairment assessment.

Amendment to Credit Facility

On May 23, 2025, we entered into the Fifth Amendment to our Credit Facility. The Fifth Amendment amends the terms of certain of the financial and restrictive covenants in the Credit Facility to provide us with additional flexibility to operate our business from the first quarter of fiscal 2026 through the first quarter of fiscal 2027 (the “Extended Covenant Relief Period”). We may voluntarily exit the Extended Covenant Relief Period at any time, which would revert the terms of the Credit Facility to the terms existing before the Fourth Amendment, with the exception of the modified definition of “EBITDAR,” described below.

During the Extended Covenant Relief Period, the minimum interest coverage ratio will be reduced from 1.55x to 1.00x to: (a) 1.15x to 1.00x from the first quarter of fiscal 2026 through the third quarter of fiscal 2026; (b) 1.25x to 1.00x from the fourth quarter of fiscal 2026 through the first quarter of fiscal 2027; and (c) 1.55x to 1.00x for the second quarter of fiscal 2027 and thereafter. During the Extended Covenant Relief Period, the maximum ratio of adjusted debt to EBITDAR remains at 4.75x to 1.00x, except that, if we completed a qualified acquisition during the Extended Covenant Relief Period, the maximum ratio would increase to 5.00x to 1.00x for a certain 12-month period after the qualified acquisition. In addition to the Fourth Amendment modifications, the Fifth Amendment further modifies the definition of “EBITDAR” to permit add-backs relating to non-cash impairment and other expenses, with the restriction for add-backs of certain cash expense items up to 20% of EBITDA from the first quarter of fiscal 2026 through the fourth quarter of fiscal 2026 and up to 15% of EBITDA from the first quarter of fiscal 2027 and thereafter.

During the Extended Covenant Relief Period, the restrictions on our ability to declare dividends were modified to reduce the cushion inside the threshold required for us to be able to declare dividends without restriction from 0.50x to 0.25x. In addition, during the Extended Covenant Relief Period, we must have minimum liquidity of at least $300 million to declare dividends. We are prohibited from repurchasing our securities during the Extended Covenant Relief Period if there are outstanding amounts under the Credit Facility immediately before or after giving effect to the repurchase. During the Extended Covenant Relief Period, we may acquire stores or other businesses as long as we have minimum liquidity of at least $300 million after completing the acquisition.

We paid the lenders certain amounts, including a consent fee equal to 0.075% of the aggregate principal amount of each consenting lender’s portion of the commitments under the Credit Facility, to facilitate the amendment and closing of the Fifth Amendment.