Treadco, Inc. Announces 1997 Q1 Results
23 April 1997
Treadco, Inc. Announces 1997 First Quarter Operating Results
FORT SMITH, Ark., April 23 -- Treadco, Inc.
announced today that for the 1997 first quarter, it had sales of $33.2 million
with a net loss of $1.9 million, or a $0.37 loss per common share.
"The first quarter is always a slow period for Treadco, but 1997 was
further affected by slower-than-expected replacement of national account
retread business lost in 1996 as we converted to the Oliver process," said
John R. Meyers, President and CEO. "The national account business tends to be
less seasonal in nature than the smaller, more service-sensitive accounts.
"This was our second full quarter utilizing the Oliver Rubber Company
process as our pre-cure method," said Meyers. "The first six weeks of the
fourth quarter of 1996 gave us some unwarranted optimism in what the seasonal
downturn would be. By the end of January, it was obvious that we needed to
adjust costs to more closely reflect the business levels. Since that time, we
have increased our emphasis on cost reduction to lower our break-even point
while continuing to replace lost national account business.
"The new tire segment of our business continued to suffer low margins even
though the volume was favorable. This was somewhat offset by increases in
service revenues which tend to have higher margins than the other segments,"
said Meyers. "The first quarter was also negatively impacted by unfavorable
experience in several areas, including self-insurance costs and doubtful
accounts."
For the 1997 first quarter, "same store" sales decreased 4.2% which was
offset by a 7.6% increase in "new store" sales from the 1996 first quarter.
"Same store" sales include locations that have been in operation for the
entire periods compared.
The foregoing release contains forward-looking statements that are based
on current expectations and are subject to a number of risks and
uncertainties. Actual results could differ materially from current
expectations due to a number of factors, including general economic
conditions; competitive initiatives and pricing pressures; availability and
cost of capital; shifts in market demand; weather conditions; government
regulations; the performance and needs of industries served by Treadco; actual
future costs of operating expenses such as the price of oil; self-insurance
claims and employee wages and benefits; and the timing and amount of capital
expenditures.
The following table provides a breakdown on sales by category:
Three Months Ended
March 31
1997 1996 %
SALES
Retread $ 13,684,827 $ 14,485,511 (5.5)%
New tires 16,443,687 15,026,435 9.4%
Service 3,082,960 2,621,692 17.6%
TOTAL $ 33,211,474 $ 32,133,638 3.4%
TREADCO, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
1997 1996
Sales:
Non-affiliates $ 32,094,010 $ 31,632,333
Affiliates 1,117,464 501,305
Total 33,211,474 32,133,638
Costs and Expenses:
Materials and cost of new tires 23,260,210 23,565,762
Salaries and wages 6,209,620 5,267,861
Depreciation and amortization 1,353,811 860,336
Administrative and general 4,922,887 3,980,643
Amortization of goodwill 115,497 115,497
Total 35,862,025 33,790,099
Operating loss (2,650,551) (1,656,461)
Other income:
Interest income 2,357 15,129
Gain on asset sales 3,548 4,483
Other 34,363 24,806
Total 40,268 44,418
Other expenses:
Interest 309,630 160,469
Amortization of deferred financing
costs and noncompete agreements 65,312 65,312
Total 374,942 225,781
Loss before income taxes (2,985,225) (1,837,824)
Federal and State income taxes (credit):
Current (1,148,303) (657,601)
Deferred 51,861 1,359
Total (1,096,442) (656,242)
Net loss $ (1,888,783) $ (1,181,582)
Net loss per share $ (0.37) $ (0.23)
Average shares outstanding 5,072,255 5,072,255
Cash dividends paid per common
share $ 0.04 $ 0.04
SOURCE Treadco, Inc.
CONTACT: Randall M. Loyd, Director-Financial Reporting, Treadco,
501-785-6200