TBC Reports Record Second Quarter Earnings Per Share
MEMPHIS, Tenn.--July 25, 2001--TBC Corporation today reported record second quarter earnings of $0.26 per share for the three months ended June 30, 2001.Net sales for the second quarter increased 24% to $255.5 million, compared with $206.4 million in the year-earlier period. Net income for the second quarter totaled $5.5 million, or $0.26 per diluted share, up from $5.0 million, or $0.24 per diluted share. Net sales for the first half increased 26% to $482.7 million, compared with $383.8 in the first half of 2000. Net income for the first half rose to $9.8 million, or $0.46 per diluted share, compared with $9.0 million, or $0.42 per diluted share a year ago.
"The record net sales and earnings for the quarter further affirm the value of the actions we are taking to increase TBC's retail presence," remarked Larry Day, President and Chief Executive Officer. "We are especially pleased that this marked another quarter in which we surpassed published analyst projections. We believe that our 2001 target remains reasonable for attaining the milestone mark of $1 billion in annual sales for the first time. Although we will face difficult year-to-year earnings comparisons in both the third and fourth quarters, we expect to show a gain for the second half as a whole, resulting in increased earnings per share for the year.
"Our strong performance for the first half was aided by positive contributions from our Tire Kingdom chain of retail tire service centers acquired in June 2000 and our Big O chain of franchised tire centers. We are pursuing multiple avenues for expanding these retail concepts that involve new store development as well as potential acquisitions. Tire Kingdom currently operates 171 retail centers, including eight new centers that were opened in the first half. We expect to surpass that growth in the second half based on the current pipeline of development sites. Big O's expansion during the first half was highlighted by the addition of 25 stores, bringing the total number to a new high of 487 at mid-year.
Day added, "During the second quarter, we also made improvements in our wholesale operations to reinforce TBC's position as the nation's leading marketer and distributor of private brand replacement tires. We expanded our Carroll's Tire unit into Virginia and Maryland by the opening of three new centers. These new locations logically extend our geographic coverage and benefit from their close proximity to our mid-Atlantic master mixing center. We also formed a Private Brands division that will be responsible for the marketing and sales of TBC's proprietary private brands: Multi-Mile, Cordovan, Sigma and the newly-acquired Vanderbilt/Turbo-Tech line. We believe that this new organizational structure, headed by Ken Dick, will enhance our prospects in what is admittedly a very competitive environment."
TBC CORPORATION
Condensed Consolidated Financial Results
(Unaudited)
Three Months Ended
June 30,
---------------------------
2001 2000
---------------------------
Net sales $255,486,000 $206,434,000
Income before income taxes 9,323,000 8,194,000
Income taxes 3,798,000 3,185,000
Net earnings $ 5,525,000 $ 5,009,000
Earnings per share
Basic $ 0.26 $ 0.24
Diluted 0.26 0.24
Average number of shares
and equivalents outstanding 21,192,000 21,215,000
Six Months Ended
June 30,
---------------------------
2001 2000
---------------------------
Net sales $482,679,000 $383,823,000
Income before income taxes 16,659,000 14,723,000
Income taxes 6,876,000 5,769,000
Net earnings $ 9,783,000/a $ 8,954,000
Earnings per share
Basic $ 0.47/a $ 0.42
Diluted 0.46/a 0.42
Average number of shares
and equivalents outstanding 21,104,000 21,208,000
(a) Results for the six months ended June 30, 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
June 30, December 31,
2001 2000
----------------------------
CURRENT ASSETS: (Unaudited)
Cash and cash equivalents $ 1,569 $ 1,681
Accounts and notes receivable,
less allowance for doubtful
accounts of $8,125 on June 30,
2001 and $7,831 on December 31,
2000:
Related parties 20,468 16,942
Other 101,613 94,836
--------- ------------
Total accounts and notes
receivable 122,081 111,778
Inventories 175,636 168,141
Refundable federal and state
income taxes 2,289 3,099
Deferred income taxes 12,295 12,506
Other current assets 13,014 10,594
--------- ------------
Total current assets 326,884 307,799
--------- ------------
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Land and improvements 5,550 6,782
Buildings and leasehold improvements 26,639 27,906
Furniture and equipment 50,491 48,132
--------- ------------
82,680 82,820
Less accumulated depreciation 32,284 27,787
--------- ------------
Total property, plant and
equipment 50,396 55,033
--------- ------------
TRADEMARKS, NET 15,809 15,987
--------- ------------
GOODWILL, NET 52,497 50,760
--------- ------------
OTHER ASSETS 23,674 21,054
--------- ------------
TOTAL ASSETS $ 469,260 $ 450,633
========= ============
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
2001 2000
----------------------------
CURRENT LIABILITIES: (Unaudited)
Outstanding checks, net $ 10,581 $ 10,037
Notes payable to banks 32,000 11,993
Current portion of long-term debt
and capital lease obligations 16,419 13,948
Accounts payable, trade 62,438 75,407
Other current liabilities 39,377 39,770
----------- ------------
Total current liabilities 160,815 151,155
----------- ------------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, LESS CURRENT PORTION 112,501 113,531
----------- ------------
NONCURRENT LIABILITIES 5,354 5,111
----------- ------------
DEFERRED INCOME TAXES 7,000 6,784
----------- ------------
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value, shares
issued and outstanding - 20,987 on
June 30, 2001 and 20,939 on
December 31, 2000 2,099 2,094
Additional paid-in capital 10,241 9,760
Other comprehensive income (488) --
Retained earnings 171,738 162,198
----------- ------------
Total stockholders' equity 183,590 174,052
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 469,260 $ 450,633
=========== ============
TBC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
--------------------- -------------------
2001 2000 2001 2000
--------------------- -------------------
NET SALES/b $ 255,486 $ 206,434 $ 482,679 $ 383,823
--------------------- -------------------
COSTS AND EXPENSES:
Cost of sales 188,562 164,744 354,027 310,247
Distribution expenses 12,547 11,734 24,742 22,948
Selling, administrative
and retail store
expenses 42,806 19,648 82,938 32,059
Interest expense - net 2,835 2,779 6,258 4,887
Other (income) expense -
net (587) (665) (1,945) (1,041)
--------------------- -------------------
Total costs and
expenses 246,163 198,240 466,020 369,100
--------------------- -------------------
INCOME BEFORE INCOME TAXES 9,323 8,194 16,659 14,723
PROVISION FOR INCOME TAXES 3,798 3,185 6,876 5,769
--------------------- -------------------
NET INCOME $ 5,525 $ 5,009 $ 9,783 $ 8,954
===================== ===================
EARNINGS PER SHARE -
Basic $ .26 $ .24 $ .47 $ .42
===================== ===================
Diluted $ .26 $ .24 $ .46 $ .42
===================== ===================
(b) Including sales to related parties of $22,812 and $21,693 in the
three months ended June 30, 2001 and 2000, respectively and
$43,336 and $41,457 in the six months ended June 30, 2001 and
2000, respectively.