Treadco, Inc. Announces 1997 Fourth Quarter and Year-End Operating Results
29 January 1998
Treadco, Inc. Announces 1997 Fourth Quarter and Year-End Operating Results
FORT SMITH, Ark., Jan. 29 -- Treadco, Inc.
announced today that it had sales of $161.3 million with a net loss of
$2.5 million, or a $0.49 loss per common share (basic and diluted), for 1997
and sales of $40.2 million with a net loss of $1.0 million, or a $0.19 loss
per common share (basic and diluted), for the 1997 fourth quarter.
"Treadco reported record sales for 1997, up 11.9% from 1996 and fourth
quarter sales increased 12.2% from the fourth quarter of 1996," said John R.
Meyers, President and Chief Executive Officer. "Treadco made significant
improvements in operations by cutting its 1996 operating loss in half and
reducing its 1997 fourth quarter operating loss $650,000 to $1.2 million.
"Although the progress is slower than I would like, I am pleased to see
continued improvement in our operating results," said Meyers. "Had we not
been adversely impacted by a shortage of new tires that prevented Treadco from
taking full advantage of strong new tire demand, the improvement in operating
results would have been greater. In addition, excess production capacity in
the low-volume winter months negatively impacts production efficiency."
For the 1997 fourth quarter, "same store" sales increased 9.2% and "new
store" sales accounted for 3.0% of the increase from the 1996 fourth quarter.
For 1997, "same store" sales increased 6.0% and "new store" sales accounted
for 5.9% of the increase from 1996. "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 of sales by category:
Three Months Ended Year Ended
December 31 December 31
% %
1997 1996Increase 1997 1996 Increase
SALES
Retread $ 16,295,613$14,040,614 16.1%$ 65,325,556 $59,762,514 9.3%
New Tires 20,127,786 18,695,717 7.7% 81,008,925 72,402,695 11.9%
Service 3,736,413 3,048,451 22.6% 14,941,730 11,988,918 24.6%
$40,159,812$35,784,782 12.2%$161,276,211 $144,154,127 11.9%
TREADCO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Year Ended
December 31 December 31
1997 1996 1997 1996
SALES
Non-affiliates $ 39,635,514 $ 35,007,217 $158,912,429 $141,613,036
Affiliates 524,298 777,565 2,363,782 2,541,091
40,159,812 35,784,782 161,276,211 144,154,127
COSTS AND EXPENSES
Materials and
cost of new tires 27,397,720 25,034,709 109,821,411 103,751,776
Salaries and wages 7,411,321 6,202,440 27,551,473 23,233,814
Depreciation and
amortization 1,464,584 1,312,660 5,610,647 4,389,621
Administrative
and general 5,133,700 5,141,064 20,801,826 17,961,604
41,407,325 37,690,873 163,785,357 149,336,815
OPERATING LOSS (1,247,513) (1,906,091) (2,509,146) (5,182,688)
OTHER INCOME
Interest income 12,276 2,762 43,682 26,252
Gain on asset sales 30,816 91,799 276,570 1,298,215
Other 133,742 35,019 290,649 129,265
176,834 129,580 610,901 1,453,732
OTHER EXPENSES
Interest 282,430 286,580 1,256,452 899,786
Amortization
of goodwill 115,497 115,497 461,989 461,989
Amortization of
noncompete agreements 65,313 65,313 261,250 261,250
463,240 467,390 1,979,691 1,623,025
LOSS BEFORE
INCOME TAXES (1,533,919) (2,243,901) (3,877,936) (5,351,981)
FEDERAL AND STATE
INCOME TAXES
(CREDIT) (551,200) (911,058) (1,373,560) (2,093,180)
NET LOSS $ (982,719)$ (1,332,843) $ (2,504,376) $ (3,258,801)
BASIC AND DILUTED
LOSS PER COMMON SHARE $(0.19) $(0.26) $(0.49) $(0.64)
CASH DIVIDENDS PAID
PER COMMON SHARE $0.00 $0.04 $0.12 $0.16
TREADCO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
December 31 December 31
1997 1996
ASSETS
Current assets $ 55,644,791 $ 57,829,009
Property, plant and equipment (net) 31,329,068 33,185,704
Other assets 790,170 1,244,938
Goodwill (less amortization) 12,694,153 13,156,142
$ 100,458,182 $ 105,415,793
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $28,372,288 $23,786,008
Long-term debt (less current portion) 12,883,763 19,610,482
Other liabilities 367,563 71,689
Stockholders' equity 58,834,568 61,947,614
$ 100,458,182 $ 105,415,793
TREADCO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Year Ended
December 31
1997 1996
OPERATING ACTIVITIES
Net cash provided by
operating activities $ 10,012,274 $ 7,889,987
INVESTING ACTIVITIES
Purchases of property,
plant and equipment less
capitalized leases (2,015,326) (11,433,665)
Proceeds from asset sales 856,129 3,048,387
Net cash used in investing activities (1,159,197) (8,385,278)
FINANCING ACTIVITIES
Borrowings under revolving
credit facility 33,885,000 36,635,000
Payments under revolving
credit facility (40,185,000) (36,335,000)
Payments on long-term debt (2,085,358) (597,244)
Dividends paid (608,671) (811,562)
Net increase in cash overdrafts 125,148 --
Net cash used in financing activities (8,868,881) (1,108,806)
NET DECREASE IN CASH AND CASH EQUIVALENTS (15,804) (1,604,097)
Cash and cash equivalents at
beginning of period 15,804 1,619,901
CASH AND CASH EQUIVALENTS AT END OF PERIOD $-- $ 15,804
SOURCE Treadco, Inc.