American Tire Distributors Posts $1.9 Million Net Income

    CHARLOTTE, N.C.--Aug. 14, 2002--American Tire Distributors, Inc., a nationwide distributor of tires, wheels and automotive accessories, today announced its second-quarter financial results swung to a profit.
    A 21.4% reduction in operating expenses contributed to net income of $1.9 million for the three months that ended June 29, 2002 up from a loss of $12.6 million for the same period 2001. The year-ago results included a loss of $11.2 million on the sale of discontinued operations. Total operating expenses were $41.5 million, compared with $52.8 million a year ago.
    The Company was able to move to positive earnings despite a drop in revenue caused by unusual circumstances in the prior-year period. Sales from the Company's distribution centers open for at least a year were $277.6 million down 8% from $301.8 million a year ago. Sales from the prior-year quarter were given a substantial boost from the highly publicized recall of certain Firestone tires. Earnings before interest, taxes, depreciation and amortization (EBITDA) declined slightly to $10.0 million from $10.7 million in the prior year.
    "For the second consecutive quarter, we have been able to improve results significantly in a very tough industry environment," said Richard P. "Dick" Johnson, President and Chief Executive Officer of American Tire Distributors. "I'm very proud of the efforts of our 1,900 employees, who are responsible for these excellent results."
    Because of the unusual impact of the Firestone recall, the Company believes its first-quarter results provide a more meaningful comparison. EBITDA rose to $10.0 million, up from $7.4 million in the quarter ending March 31, 2002. Sales from the Company's distribution centers open at least a year rose to $277.6 million from $251.6 million.
    For the six months that ended June 29, 2002, consolidated net sales declined to $529.1 million from $569.6 million for the same period in 2001. EBITDA increased to $17.4 million from $13.6 million, in part due to a 20.5% decline in operating expenses. Net income rose to a positive $31.1 million from a loss of $21.2 million.
    The 2002 six-month net profit includes an extraordinary gain in the amount of $29.9 million related to the Company's repurchase of its Series D Senior Notes, announced April 12, 2002, and included in the first-quarter results. The reported loss in 2001 includes the same $11.2 million loss on the sale of discontinued operations mentioned above.

    About American Tire Distributors

    American Tire Distributors, formerly Heafner Tire Group, Inc., is one of the nation's largest independent suppliers of tires to the replacement tire market. It operates 62 distribution centers servicing 35 states. The Company is focused on helping independent tire dealers compete with larger retailers by offering the most complete, coast-to-coast selection of tires, wheels and related products and value-added services. American Tire Distributors employs more than 200 people in its Charlotte-area headquarters, distribution center and regional hub and 1,900 employees across its nationwide distribution center network.