TBC Reports Record Sales of $903 Million for 2000; Expects to Reach $1 Billion in Sales for 2001
MEMPHIS, Tenn.--Feb. 5, 2001--TBC Corporation today reported results for the fourth quarter and year ended December 31, 2000.Net sales for the three months ended December 31, 2000 increased 37% to a new quarterly record of $251.0 million compared with $182.7 million in the year-earlier period. Excluding special items, income for the fourth quarter totaled $0.25 per share, up from $0.22 per share in the year-earlier period. The net income for the fourth quarter of 2000 included a charge of $0.04 per share for certain management restructuring. Net income in the year-earlier fourth quarter included a gain of $0.03 per share from the sale of a subsidiary distribution center.
Net sales for 2000 increased 21% to $902.7 million compared with $743.1 million in 1999. Excluding special items, income for 2000 totaled $0.92 per share, compared with $0.95 per share for 1999. Results for the year ended December 31, 1999 also included a special charge of $0.13 per share after taxes, related to the write-off of a note receivable from a former distributor that had been the subject of litigation since 1989.
"TBC achieved solid fundamental progress during 2000 in the face of persistently stiff competition," remarked Larry Day, President and Chief Executive Officer. "The accomplishments during the year track directly with the vision and strategic direction we have set for TBC's future growth. The acquisition in June 2000 of Tire Kingdom underscored a key goal of integrating forward to control more of the downstream distribution channels for our proprietary brands. During the last sixty days, we purchased 24 additional locations, bringing the total number of company-owned Tire Kingdom locations to 172, up from 148 when we made the acquisition. Including the volume that is represented by our Big O Tire subsidiary, we expect to control more than 20% of the shipments of our brands to the retail level during 2001. Our objective is to increase this percentage further over the next several years which, in turn, will assist us in building even closer working partnerships with our international array of suppliers.
"The emphasis of our wholesale distribution activities continues to be serving the nation's independent tire dealers who remain the dominant force in the replacement tire market. This marked the first full year for the operation of our mid-Atlantic distribution center. We are very pleased with the return thus far from this facility, which has shortened the supply cycle with many of our key customers. We also were aided during 2000 by the virtual makeover of our Sigma brand to broaden its coverage and position it for future gains in market share. Our shipments of the Sigma brand more than doubled during 2000, indicating the potential that we have to market this as a fully complementary line to our well-established Multi-Mile and Cordovan brands."
Day added, "Our goal for 2001 is to achieve an increase in annual sales to more than $1 billion. One of the inherent advantages of the replacement tire aftermarket is that demand is not affected significantly by short-term swings in the economy. We believe the breadth of our tire lines and efficient distribution system equip us well to capitalize on this opportunity to increase our market share at each level where we compete.
"We expect to generate more than $60 million in EBITDA for 2001, up from $53.5 million in 2000. This positive cash flow is a valuable financial asset and strong support for our expansion plans. Our intent is to maintain a sound financial position that will enable us to pursue not only internal growth activities but also additional strategic acquisitions."
TBC Corporation is one of the nation's largest independent marketers and distributors of tires for the automotive replacement market.
This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks, uncertainties and other factors which could cause actual results to differ materially, including but not limited to, the degree of competition in the replacement tire industry, changes in consumer spending on automobiles and replacement automotive products and the Company's ability to continue to obtain products in sufficient quantity and at competitive prices. Additional information on factors that could potentially affect the Company or its financial results may be found in the Company's filings with the Securities and Exchange Commission.
TBC CORPORATION
Condensed Consolidated Financial Results
Three Months Ended
December 31,
----------------------------
2000 1999
------------ ------------
Net sales $251,034,000 $182,715,000
Income before income taxes 7,612,000 8,305,000
Income taxes 3,144,000 3,039,000
Net earnings $ 4,468,000/a $ 5,266,000/b
Earnings per share (basic and diluted) $ 0.21/a $ 0.25/b
Average number of shares outstanding 21,119,000 21,186,000
Year Ended
December 31,
----------------------------
2000 1999
------------ ------------
Net sales $902,740,000 $743,050,000
Income before income taxes 31,047,000 29,260,000
Income taxes 12,323,000 11,321,000
Net earnings $ 18,724,000/a $ 17,939,000/c
Earnings per share (basic and diluted) $ 0.88/a $ 0.85/c
Average number of shares outstanding 21,191,000 21,189,000
a Results for the three months and year ended December 31, 2000
include a charge of $0.04 per share related to certain management
restructuring.
b Results for the three months ended December 31, 1999 included a
net gain of $0.03 per share related to the sale of a subsidiary
distribution center.
c Results for the year ended December 31, 1999 included the fourth
quarter net gain of $0.03 per share, as well as a charge of $0.13
per share related to the write-off of a note receivable that had
been the subject of litigation since 1989.
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
December 31,
2000 1999
-------- --------
CURRENT ASSETS:
Cash and cash equivalents $ 1,681 $ 1,273
Accounts and notes receivable, less
allowance for doubtful accounts of
$7,831 in 2000 and $7,751 in 1999:
Related parties 16,942 9,546
Other 94,836 75,756
-------- --------
Total accounts and notes receivable 111,778 85,302
Inventories 168,141 138,054
Refundable federal and state
income taxes 3,099 3,306
Deferred income taxes 12,506 6,079
Other current assets 10,594 15,553
-------- --------
Total current assets 307,799 249,567
-------- --------
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Land and improvements 6,782 8,129
Buildings and leasehold improvements 27,906 27,330
Furniture and equipment 48,132 35,124
-------- --------
82,820 70,583
Less accumulated depreciation 27,787 25,269
-------- --------
Total property, plant and equipment 55,033 45,314
-------- --------
TRADEMARKS, NET 15,987 16,437
-------- --------
GOODWILL, NET 50,760 18,018
-------- --------
OTHER ASSETS 21,054 19,037
-------- --------
TOTAL ASSETS $450,633 $348,373
======== ========
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31,
-------------------------
2000 1999
-------- --------
CURRENT LIABILITIES:
Outstanding checks, net $ 10,037 $ 5,170
Notes payable to banks 91,993 63,762
Current portion of long-term debt
and capital lease obligations 6,948 6,514
Accounts payable, trade 75,407 40,417
Other current liabilities 39,770 20,035
-------- --------
Total current liabilities 224,155 135,898
-------- --------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, LESS CURRENT PORTION 40,531 47,000
-------- --------
NONCURRENT LIABILITIES 5,111 1,420
-------- --------
DEFERRED INCOME TAXES 6,784 7,673
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value,
shares issued and outstanding -
20,939 in 2000 and 21,182 in 1999 2,094 2,118
Additional paid-in capital 9,760 9,639
Retained earnings 162,198 144,625
-------- --------
Total stockholders' equity 174,052 156,382
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $450,633 $348,373
======== ========
TBC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Years Ended
December 31, December 31,
---------------------- ---------------------
2000/a 1999/b 2000/a 1999/c
--------- --------- --------- ---------
(Unaudited)
NET SALES $ 251,034 $ 182,715 $ 902,740 $ 743,050
--------- --------- --------- ---------
COSTS AND EXPENSES:
Cost of sales 188,638 151,338 704,493 613,491
Distribution 12,774 13,110 49,144 46,313
Selling and
administrative 38,925 11,283 107,662 45,637
Provision for
doubtful accounts
and notes 775 (217) 1,468 5,090
Interest expense 3,098 2,195 11,453 7,676
Other (income)
expense - net (788) (3,299) (2,527) (4,417)
--------- --------- --------- ---------
Total costs
and expenses 243,422 174,410 871,693 713,790
--------- --------- --------- ---------
INCOME BEFORE INCOME
TAXES 7,612 8,305 31,047 29,260
PROVISION FOR INCOME
TAXES 3,144 3,039 12,323 11,321
--------- --------- --------- ---------
NET INCOME $ 4,468 $ 5,266 $ 18,724 $ 17,939
========= ========= ========= =========
EARNINGS PER SHARE -
Basic and diluted $ .21 $ .25 $ .88 $ .85
========= ========= ========= =========
a Results for the three months and year ended December 31, 2000
include a charge of $.04 per share related to certain management
restructuring.
b Results for the three months ended December 31, 1999 included a
gain of $.03 per share, related to the sale of a subsidiary
distribution center.
c Results for the year ended December 31, 1999 include the fourth
quarter net gain of $.03 per share, as well as a charge of $.13
per share related to the write-off of a note receivable that had
been the subject of litigation since 1989.