Treadco, Inc. Announces 1997 Q1 Results

23 April 1997

    FORT SMITH, Ark., April 23 -- Treadco, Inc.
announced today that for the 1997 first quarter, it had sales of $33.2 million
with a net loss of $1.9 million, or a $0.37 loss per common share.
    "The first quarter is always a slow period for Treadco, but 1997 was
further affected by slower-than-expected replacement of national account
retread business lost in 1996 as we converted to the Oliver process," said
John R. Meyers, President and CEO.  "The national account business tends to be
less seasonal in nature than the smaller, more service-sensitive accounts.
    "This was our second full quarter utilizing the Oliver Rubber Company
process as our pre-cure method," said Meyers.  "The first six weeks of the
fourth quarter of 1996 gave us some unwarranted optimism in what the seasonal
downturn would be.  By the end of January, it was obvious that we needed to
adjust costs to more closely reflect the business levels.  Since that time, we
have increased our emphasis on cost reduction to lower our break-even point
while continuing to replace lost national account business.
    "The new tire segment of our business continued to suffer low margins even
though the volume was favorable.  This was somewhat offset by increases in
service revenues which tend to have higher margins than the other segments,"
said Meyers.  "The first quarter was also negatively impacted by unfavorable
experience in several areas, including self-insurance costs and doubtful
accounts."
    For the 1997 first quarter, "same store" sales decreased 4.2% which was
offset by a 7.6% increase in "new store" sales from the 1996 first quarter.
"Same store" sales include locations that have been in operation for the
entire periods compared.
    The foregoing release contains forward-looking statements that are based
on current expectations and are subject to a number of risks and
uncertainties.  Actual results could differ materially from current
expectations due to a number of factors, including general economic
conditions; competitive initiatives and pricing pressures; availability and
cost of capital; shifts in market demand; weather conditions; government
regulations; the performance and needs of industries served by Treadco; actual
future costs of operating expenses such as the price of oil; self-insurance
claims and employee wages and benefits; and the timing and amount of capital
expenditures.
    The following table provides a breakdown on sales by category:

                                             Three Months Ended
                                                   March 31
                                          1997        1996        %
    SALES
     Retread                          $ 13,684,827  $ 14,485,511   (5.5)%
     New tires                          16,443,687    15,026,435    9.4%
     Service                           3,082,960     2,621,692   17.6%
    TOTAL                             $ 33,211,474  $ 32,133,638    3.4%


                           TREADCO, INC.
                Consolidated Statements of Operations
                            (Unaudited)

                                           Three Months Ended
                                                March 31,
                                            1997         1996
       Sales:
    Non-affiliates                     $ 32,094,010  $ 31,632,333
    Affiliates                            1,117,464       501,305
    Total                                33,211,474    32,133,638
       Costs and Expenses:
    Materials and cost of new tires      23,260,210    23,565,762
    Salaries and wages                    6,209,620     5,267,861
    Depreciation and amortization         1,353,811       860,336
    Administrative and general            4,922,887     3,980,643
    Amortization of goodwill                115,497       115,497
    Total                                35,862,025    33,790,099
    Operating loss                       (2,650,551)   (1,656,461)
       Other income:
    Interest income                           2,357        15,129
    Gain on asset sales                       3,548         4,483
    Other                                    34,363        24,806
    Total                                    40,268        44,418
       Other expenses:
    Interest                                309,630       160,469
    Amortization of deferred financing
     costs and noncompete agreements         65,312        65,312
    Total                                   374,942       225,781
    Loss before income taxes             (2,985,225)   (1,837,824)
       Federal and State income taxes (credit):
    Current                              (1,148,303)     (657,601)
    Deferred                                 51,861         1,359
    Total                                (1,096,442)     (656,242)
    Net loss                           $ (1,888,783) $ (1,181,582)
    Net loss per share                 $      (0.37) $      (0.23)
    Average shares outstanding            5,072,255     5,072,255
    Cash dividends paid per common
     share                             $       0.04  $       0.04

SOURCE  Treadco, Inc.