TBC Reports Record First Quarter Earnings Per Share
MEMPHIS, Tenn.--April 23, 2001--TBC Corporation today reported record first quarter earnings of $0.20 per share for the three months ended March 31, 2001, up from earnings of $0.19 per share a year ago. Net sales for the first quarter increased 28% to $227.2 million compared with $177.4 million, and net income rose to $4.3 million versus $3.9 million in the first quarter of 2000."We are encouraged by the progress reflected in our results for the first quarter." remarked Larry Day, President and Chief Executive Officer. "Our income for the period, excluding a net gain of $0.02 per share realized from the sale and leaseback of a distribution center, exceeded published analyst projections. We had expected to face a difficult industry backdrop during the quarter, and reports are that manufacturers' shipments of tires fell 7%. Our significant increase in net sales principally reflects the inclusion of our Tire Kingdom chain of retail tire service centers that we acquired in June 2000. We believe the strong relative performance of TBC in the first quarter further validates the rationale for the Tire Kingdom acquisition. Our retail operations are contributing positively to our income and are serving as a growth vehicle for TBC. We now have 170 locations, up from 148 retail centers in mid-2000. Our plan is progressing well for expanding Tire Kingdom, supported by our core wholesale tire operations. As expected, we are finding strong assets in the customer goodwill and high service standards that Tire Kingdom had established. Combining these operations is helping us offset the weakness in the industry and is providing us with valuable strategic control over more of the marketing channel for our proprietary brands."
Day added, "TBC has the advantage that demand for replacement automotive tires has historically tracked more closely with stable trends such as total vehicle miles driven than with swings in the economy. Based on current indications, we remain optimistic about reaching our goal for 2001 of surpassing annual sales of $1 billion for the first time. Although the competitiveness of the tire aftermarket demands that we aggressively seek additional ways to drive costs out of our system, our multi-channel marketing strategy provides us an outstanding opportunity to continue gaining market share. We recently opened a distribution center for our Carroll's Tire unit in Baltimore, Md., extending our geographic coverage into a new area that we will be able to service very well from our Mid-Atlantic master warehouse. We also are continuing to expand our Big O chain of franchised tire centers. During the first quarter, eight locations were added, increasing the size of this unique chain to 470 stores. We have the benefit of a financial position that provides us with considerable flexibility to execute our expansion plans and are positive about TBC's growth prospects."
TBC CORPORATION
Condensed Consolidated Financial Results
(Unaudited)
Three Months Ended
March 31,
2001 2000
--------------------------
Net sales $227,193,000 $177,389,000
Income before income taxes 7,336,000 6,529,000
Income taxes 3,078,000 2,584,000
Net earnings $ 4,258,000(a) $ 3,945,000
Earnings per share (basic and diluted) $ 0.20(a) $ 0.19
Average number of shares outstanding 21,016,000 21,201,000
(a) Results for the three months ended March 31, 2001 include an
after-tax gain of $428,000, or $0.02 per share, from the sale and
leaseback of a distribution center.
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
March 31, December 31,
2001 2000
--------- ------------
CURRENT ASSETS: (Unaudited)
Cash and cash equivalents $ 1,283 $ 1,681
Accounts and notes receivable, less
allowance for doubtful accounts of
$8,069 on March 31, 2001 and $7,831
on December 31, 2000:
Related parties 17,165 16,942
Other 97,157 94,836
--------- ------------
Total accounts and notes
receivable 114,322 111,778
Inventories 171,225 168,141
Refundable federal and state income
taxes 506 3,099
Deferred income taxes 12,304 12,506
Other current assets 13,516 10,594
--------- ------------
Total current assets 313,156 307,799
--------- ------------
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Land and improvements 5,787 6,782
Buildings and leasehold improvements 24,864 27,906
Furniture and equipment 49,436 48,132
--------- ------------
80,087 82,820
Less accumulated depreciation 29,811 27,787
--------- ------------
Total property, plant and equipment 50,276 55,033
--------- ------------
TRADEMARKS, NET 15,875 15,987
GOODWILL, NET 52,930 50,760
OTHER ASSETS 22,496 21,054
--------- ------------
TOTAL ASSETS $ 454,733 $ 450,633
========= ============
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
2001 2000
--------- ------------
CURRENT LIABILITIES: (Unaudited)
Outstanding checks, net $ 4,247 $ 10,037
Notes payable to banks 23,600 11,993
Current portion of long-term debt
and capital lease obligations 13,852 13,948
Accounts payable, trade 71,087 75,407
Other current liabilities 38,149 39,770
--------- ------------
Total current liabilities 150,935 151,155
--------- ------------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, LESS CURRENT PORTION 113,506 113,531
--------- ------------
NONCURRENT LIABILITIES 5,502 5,111
--------- ------------
DEFERRED INCOME TAXES 6,904 6,784
--------- ------------
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value, shares
issued and outstanding - 20,984 on
March 31, 2001 and 20,939 on
December 31, 2000 2,098 2,094
Additional paid-in capital 10,016 9,760
Other comprehensive income (685) --
Retained earnings 166,457 162,198
--------- ------------
Total stockholders' equity 177,886 174,052
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 454,733 $ 450,633
========= ============
TBC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months
Ended March 31,
--------------------------
2001 2000
----------- -----------
NET SALES (a) $ 227,193 $ 177,389
COSTS AND EXPENSES:
Cost of sales 165,465 145,503
Distribution expenses 12,195 11,214
Selling, administrative and
retail store expenses 40,132 12,411
Interest expense - net 3,423 2,108
Other (income) expense - net (1,358) (376)
----------- -----------
Total costs and expenses 219,857 170,860
----------- -----------
INCOME BEFORE INCOME TAXES 7,336 6,529
PROVISION FOR INCOME TAXES 3,078 2,584
----------- -----------
NET INCOME $ 4,258 $ 3,945
=========== ===========
EARNINGS PER SHARE -
Basic and diluted $ .20 $ .19
=========== ===========
(a) Including sales to related parties of $20,524 and $19,764 in the
three months ended March 31, 2001 and 2000, respectively.