Heafner Announces Q2 Results
20 August 1998
Heafner Announces Record Results
CHARLOTTE, N.C.-(BUSINESS WIRE)--Aug. 20, 1998--The Heafner Group/J.H. Heafner Company, which includes ITCO Tire, Winston Tire, and Competition Parts Warehouse (CPW), and is the country's largest independent tire marketer, today announced record sales and earnings for the six months ended June 30, 1998.
Net sales for the six months ended June 30, 1998 totaled $243.2 million, an increase of $115.8 million, or 91%, from sales in the first six months of 1997 of $127.4 million. Including the results of ITCO, Winston, and CPW for each period, sales would have totaled $453.3 million for the six months ended June 30, 1998, an increase of $44.6 million, or 11%, from sales of $408.7 million for the six months ended June 30, 1997.
Operating earnings before interest, taxes, depreciation, and amortization (EBITDA), and before non-recurring restructuring and extraordinary charges, totaled $7.3 million in the six months ended June 30, 1998, an increase of $4.2 million, or 135%, from $3.1 million in the first six months of 1997. Including the results of ITCO, Winston, and CPW for each period, pro forma adjusted EBITDA totaled $16.6 million in the six months ended June 30, 1998, an increase of $6.1 million, or 58%, from $10.5 million in the first six months of 1997.
"I am extremely pleased with the financial results of The Heafner Group," said William H. Gaither, President and CEO. "All four of our companies achieved outstanding results during the first half of 1998. To achieve a sales growth rate of 11% in the industry we serve, particularly given the efforts involved in bringing these companies together during this period of time, says much about the operating management we have in place. We estimate that our sales growth so far in 1998 is more than twice that of the overall replacement tire market, and was entirely volume driven with little price movement in the market.
"Furthermore, to achieve a growth in pro forma earnings of 58% in the first six months of 1998 proves that our market share gains did not come at the expense of earnings," continued Mr. Gaither. "The increase in sales contributed to our earnings increase. However, we were also able to increase our overall gross margins by more than 1%, and did a good job of controlling operating expenses."
Mr. Gaither concluded, "I am very excited about the remainder of 1998. Our overall business remains strong and the synergies of this combination will allow us to serve our customer base better than ever before, and provide a level of overall service unmatched in the industry."
The Heafner Group
Financial Highlights
(in million $)
Six Months Ended
June 30, 1998 June 30, 1997
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Reported Results:
Net Sales $243.2 $127.4
EBITDA(1) 7.3 3.1
Pro Forma Results(2):
Net Sales $453.3 $408.7
EBITDA(1) 16.6 10.5
(1) - excludes non-recurring restructuring and extraordinary charges totaling $5.0 million.
(2) - results assume that the combination of J.H. Heafner, ITCO, Winston, and CPW had occurred at January 1, 1997. Winston was acquired by Heafner on May 7, 1997, CPW on May 20, 1998, and the merger with ITCO occurred on May 20, 1998.
Certain information included in this release is forward-looking. Such forward-looking information must be considered in light of important risks and uncertainties that could materially alter results in the future from those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks and uncertainties include, among others, the ability of the Company to successfully implement its business strategy, integrate the new divisions, and market and sell new products. 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.
The Heafner Group is the country's largest independent marketer of tires and tire products. The Heafner Group includes Heafner Tires and Products and ITCO Tire in the Southeast, and Winston Tire and Competition Parts Warehouse in California and Arizona. It operates over 65 distribution centers and 215 retail tire and auto service stores. For information contact Donald C. Roof, CFO at 704/423-8989.