TBC Reports Third Quarter Earnings
22 October 1998
TBC Reports Third Quarter Earnings; Net Income Totals $5.5 Million, or $0.25 Per Share
MEMPHIS, Tenn.--Oct. 22, 1998--TBC Corporation today reported earnings for the third quarter and nine months ended September 30, 1998.Net income for the quarter totaled $5.5 million, or $0.25 per share, compared with $6.0 million, or $0.26 per share, in the third quarter of last year. Net sales for the three months ended September 30, 1998 totaled $177.7 million compared with $182.6 million in the year-earlier period. Net income for the first nine months totaled $12.4 million, or $0.54 per share, compared with $14.1 million, or $0.60 per share, a year ago. Net sales for the first nine months of 1998 totaled $480.3 million compared with $490.8 million in the year-earlier period.
"Our third-quarter performance reflects a favorable trend compared with results in the second quarter," remarked Louis S. DiPasqua, President and Chief Executive Officer. "We are pleased with the initial response to the new marketing programs that have been introduced to counter the extremely competitive environment that persists in the replacement tire market. Our challenge is to sustain this momentum by continuing to offer customers sound value through the broadest line of private brand tires available and a highly efficient distribution system."
DiPasqua noted the previously announced agreement to acquire substantially all the capital stock of Carroll's, Inc., TBC's largest distributor. He remarked, "We expect to complete this transaction within the next several weeks. We should realize some cost reductions once the two organizations are integrated, but the primary synergies from this transaction will accrue as we expand the geographic scope of the acquired operations and gain additional purchasing leverage by increasing the volume of TBC-branded tires through this wholesale distribution system.
"We have the benefit of a strong balance sheet and are continuing to evaluate other strategic transactions that can enhance our competitive position. In the third quarter, we used our financial resources to capitalize on the decline in stock prices by funding an active stock repurchase program. We repurchased a total of 1.9 million shares during the period to take advantage of what we believe will prove to be a very attractive investment for shareholders. We currently have the authorization from the Board of Directors to repurchase an additional 2.0 million shares."
TBC Corporation is one of the nation's largest marketers and distributors of tires for the automotive replacement market.
This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks, uncertainties and other factors which could cause actual results to differ materially, including but not limited to, the degree of competition in the replacement tire industry, changes in consumer spending on automobiles and replacement automotive products and the Company's ability to continue to obtain products in sufficient quantity and at competitive prices. 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.
TBC CORPORATION
Condensed Consolidated Financial Results
(Unaudited)
Three Months Ended
September 30,
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1998 1997
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Net sales $177,661,000 $182,648,000
Income before income taxes 9,166,000 9,997,000
Income taxes 3,660,000 3,955,000
Net earnings $ 5,506,000 $ 6,042,000
Earnings per share
(basic and diluted) $ 0.25 $ 0.26
Average number of shares
outstanding (diluted) 22,347,000 23,553,000
Nine Months Ended
September 30,
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1998 1997
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Net sales $480,319,000 $490,800,000
Income before income taxes 20,442,000 23,226,000
Income taxes 8,067,000 9,169,000
Net earnings $ 12,375,000 $ 14,057,000
Earnings per share
(basic and diluted) $ 0.54 $ 0.60
Average number of shares
outstanding (diluted) 22,906,000 23,614,000