Tire SellerTBC Reports Record First Quarter Earnings Per Share
MEMPHIS, Tenn., April 22-- TBC Corporation sellr of replacement tires, today reported financial results for the first quarter ended March 31, 2002. According to management, record first quarter earnings per share reflects higher sales and unit tire volume from both the Company's retail operations and wholesale distribution business.
First quarter 2002 net income climbed 26% to $4.8 million from $3.8 million in the prior year first quarter and diluted earnings per share rose 22% to $0.22 from $0.18 a year earlier. Net sales were higher at $249.7 million in the first quarter of 2002, a 10% gain versus $227.2 million in last year's first quarter. First quarter 2002 sales growth was fueled primarily by increases in tire unit volume, which was 9.6% higher in the 2002 first quarter than in the first quarter of 2001. In addition, TBC posted unit volume growth significantly above the industry unit growth rate of 5%, indicating the Company continues to build market share.
Commenting on the Company's results, Larry Day, President and Chief Executive Officer, remarked, ``Solid sales contributions from both our retail network and wholesale distribution channels indicate that TBC is effectively capitalizing on the new growth opportunities created through our multi-channel marketing approach. While competitive pressures continue to be strong, the expansion of our retail network and new product introductions helped us achieve meaningful increases in unit volume in both of our marketing channels.''
Continued Day, ``Retail expansion continues to be a growth driver of our business. A highlight of that expansion in the first quarter was our successful completion of the acquisition of Mueller Tire & Brake, one of the largest independent tire dealers in Ohio, and the integration of their 19 retail service centers into our Tire Kingdom network. A total of 22 tire and service centers were added to our Tire Kingdom and Big O retail networks in the first quarter. This brings the combined total of our retail locations to 708, compared to 640 just one year ago. We plan to have at least 750 stores in our retail systems by the end of the year, as we execute our plans of adding both company-operated and franchised locations.''
Day concluded, ``We remain on track for achieving our 2002 financial goals and outperforming our industry during the remainder of the year. We have solid momentum and our management team is focused on building shareholder value through the continued execution of our multi-channel marketing strategy.'' Day said TBC is confident that it will be able to meet or exceed the previously-announced estimate for 2002 earnings per share of $1.22.
About TBC: TBC Corporation is one of the nation's largest marketers of automotive replacement tires through a multi-channel marketing strategy. The Company's retail operations include company-operated retail centers under the Tire Kingdom brand and franchised retail tire stores under the Big O Tires brand. TBC also markets on a wholesale basis to regional tire chains and regional distributors serving independent tire dealers throughout the United States and in Canada and Mexico.
TBC Corporation Safe Harbor Statement
This document contains ``forward-looking statements,'' as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding expectations for future financial performance, which involve uncertainty and risk. It is possible that the Company's future financial performance may differ from expectations due to a variety of factors including, but not limited to: changes in economic and business conditions in the world; increased competitive activity; consolidation within and among both competitors, suppliers and customers; unexpected changes in the replacement tire market; the Company's inability to attract as many new franchisees or open as many distribution outlets as stated in its goals; changes in the Company's ability to identify and acquire additional companies in the replacement tire industry and the failure to achieve synergies or savings anticipated in such acquisitions; fluctuations in tire prices charged by manufacturers, including fluctuations due to changes in raw material and energy prices, changes in interest and foreign exchange rates; the cyclical nature of the automotive industry and the loss of a major customer or program. It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The Company makes no commitment to update any forward-looking statement included herein, or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement. 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
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended
March 31,
(Unaudited)
2002 2001
NET SALES $249,704 $227,193
COST OF SALES 183,482 165,465
GROSS PROFIT 66,222 61,728
EXPENSES:
Distribution expenses 12,497 12,195
Selling, administrative and
retail store expenses 44,481 40,132
Interest expense - net 2,021 3,423
Other (income) expense - net (364) (644)
Total expenses 58,635 55,106
INCOME BEFORE INCOME TAXES 7,587 6,622
PROVISION FOR INCOME TAXES 2,780 2,792
NET INCOME $4,807 $3,830
EARNINGS PER SHARE -
Basic $.23 $.18
Diluted $.22 $.18
Weighted Average Common Shares
and Equivalents Outstanding 21,888 21,016
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
March 31, December 31,
2002 2001
CURRENT ASSETS: (Unaudited)
Cash and cash equivalents $1,808 $2,298
Accounts and notes receivable, less
allowance for doubtful accounts of $7,908
at March 31, 2002 and $7,737 at December 31,
2001:
Related parties 19,694 17,173
Other 108,585 95,848
Total accounts and notes receivable 128,279 113,021
Inventories 188,153 172,431
Refundable federal and state income taxes 1,323 2,349
Deferred income taxes 11,075 11,501
Other current assets 17,139 16,999
Total current assets 347,777 318,599
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Land and improvements 4,756 5,032
Buildings and leasehold improvements 23,448 22,948
Furniture and equipment 58,570 52,591
86,774 80,571
Less accumulated depreciation 36,411 33,650
Total property, plant and equipment 50,363 46,921
TRADEMARKS, NET 15,824 15,824
GOODWILL, NET 58,182 51,291
OTHER ASSETS 28,142 30,325
TOTAL ASSETS $500,288 $462,960
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
2002 2001
(Unaudited)
CURRENT LIABILITIES:
Outstanding checks, net $11,934 $5,916
Notes payable to banks 21,000 34,200
Current portion of long-term debt
and capital lease obligations 17,009 16,533
Accounts payable, trade 99,767 53,227
Other current liabilities 40,024 41,516
Total current liabilities 189,734 151,392
LONG-TERM DEBT, LESS CURRENT PORTION 94,750 101,000
NONCURRENT LIABILITIES 11,527 11,721
DEFERRED INCOME TAXES 4,614 4,528
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value, shares issued
and outstanding - 21,108 on March 31, 2002
and 21,003 on December 31, 2001 2,111 2,100
Additional paid-in capital 14,982 11,783
Other comprehensive income (440) (713)
Retained earnings 183,010 181,149
Total stockholders' equity 199,663 194,319
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $500,288 $462,960