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TBC Expects to Report Lower Second Quarter Earnings

30 June 1998

TBC Expects to Report Lower Second Quarter Earnings; Expects Pressure From Competitive Conditions Through Second Half

    MEMPHIS, Tenn.--June 29, 1998--TBC Corporation today indicated that it expects to report lower sales and earnings for the second quarter of 1998 compared with the year-earlier period. For the second period of 1997, net sales were $163.8 million; and earnings amounted to $4.8 million, or $0.20 per share.
    Louis S. DiPasqua, President and Chief Executive Officer, remarked, "The improvement in demand that became apparent at the close of the first quarter did not extend through the second period due to extremely competitive conditions in the automotive tire aftermarket. Although we expect to show a gain in net income compared with the first quarter of this year, the degree of that increase will be less than we had earlier expected. As a result, net income will likely be lower than a year ago. The prevailing industry environment suggests that year-to-year comparisons will also be difficult in the third and fourth quarters.
    "We are implementing substantial changes in our marketing programs effective immediately that we are confident will be viewed favorably by our customers. TBC's brands collectively position us as the largest independent tire marketer in the industry, and we believe the actions that are being taken will enable us to extend our long-term trend of an increasing market share."
    DiPasqua added, "We are also intent on using the Company's strong financial position to capitalize on additional opportunities that the ongoing industry consolidation may present. Our Big O subsidiary, which we acquired two years ago, has contributed positively to our corporate results through its own expansion as well as through the advantages we have gained in working more closely with suppliers. Our overall focus is finding the most effective way of serving independent retail dealers who remain the dominant force in the replacement tire market."
    TBC Corporation is one of the nation's largest marketers and distributors of tires for the automotive replacement market.
    Statements in this press release or otherwise attributable to the Company regarding the Company's business which are not historical fact, including those regarding growth in its business, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Many factors could cause the Company's actual results to differ materially from those expressed in the forward-looking statements made by or on behalf of the Company including, without limitation, trends in consumer demand for replacement tires, changes in tire prices, the availability of tires from suppliers, the impact of competitive tire brands, the ability to achieve and manage growth, and other risks detailed in the Company's Annual Report on Form 10K and other filings with the SEC.