Midas, Inc. (NYSE: MDS) reported a net loss of $0.4 million—or $0.03 per diluted share—for the fourth quarter ended Dec, 31, 2011, compared to a net loss of $15.7 million—or $1.14 per diluted share—for the fourth quarter of 2010. Fourth quarter 2011 operating income was $1.4 million, compared to an operating loss of $20.4 million in the prior year. Fourth quarter 2011 operating income was negatively affected by $2.6 million for legal and investment banking expenses related to the company’s ongoing review of strategic alternatives which began in the third quarter, and by a $0.5 million write-down of certain real estate assets resulting from property appraisals that were conducted in connection with the strategic review process. Excluding these items, operating income was $4.5 million for the quarter. These items had a combined negative impact on net income of $0.12 per diluted share in the quarter. Fourth quarter 2010 operating income was negatively impacted by the $25.5 million arbitration award accrued in connection with the contractual dispute with the company’s master licensee in Europe, and was favorably impacted by the $2.5 million fee recovery awarded to Midas by the arbitral tribunal. Excluding these items, fourth quarter 2010 operating income was $2.6 million. Fiscal 2011 full-year earnings were $4.0 million—or $0.28 per diluted share—compared to a net loss of $13.4 million—or $0.97 per diluted share—the prior year. Full-year 2011 operating income of $16.7 million was negatively affected by $3.2 million in costs related to the strategic review process, $0.5 million of asset impairment charges as a result of the appraisal of the company’s real estate portfolio and $1.1 million in losses on the sale of company-operated shops to franchisees. Full-year warranty adjustments positively affected the 2011 full-year results by $1.2 million. Excluding these four items, 2011 full-year operating income was $20.3 million. The full-year 2010 operating loss of $9.0 million was negatively affected by the $25.5 million European arbitration award and was positively impacted by a $0.3 million warranty reserve adjustment. Excluding these two items, 2010 full-year operating income was $16.2 million.
Shares of Midas (NYSE:MDS) have taken a tremendous swing upward. The stock is trading at $11.47 as of 9:30 a.m. ET, 27.6% above Monday's closing price of $8.99. Volume is at 6.8 million, 199 times the daily average of 34,200.