TBC Reports Sales Gains for Fourth Quarter and Full Year
9 February 1999
TBC Reports Sales Gains for Fourth Quarter and Full Year
MEMPHIS, Tenn.--Feb. 9, 1999--TBC Corporation today reported higher net sales for the fourth quarter and year ended December 31, 1998.Net sales for the quarter ended December 31, 1998 increased to $165.8 million compared with $152.1 million in the year-earlier period. Net income for the quarter totaled $4.5 million, or $0.21 per share, compared with $5.6 million, or $0.24 per share, a year ago. Net sales for the year ended December 31, 1998 increased to $646.1 million compared with $642.9 million for 1997. Net income for 1998 totaled $16.9 million, or $0.75 per share, compared with $19.7 million, or $0.84 per share, a year ago.
"The results for the fourth quarter and second half as a whole reflected a clear upswing in our operating momentum," remarked Louis S. DiPasqua, Vice Chairman and Chief Executive Officer. "A primary goal we set for 1998 was to enhance the value TBC offers to customers. The full implementation of our Advantage 2000 marketing program proved very successful in increasing business with existing accounts as well as in supporting our initiatives to expand TBC's customer base. We are especially pleased with the progress established during the second half considering the highly competitive environment that continues to characterize the replacement tire market. We are optimistic about prospects for further improvement but recognize that future gains are going to demand an intense focus on operating as efficiently as possible while maintaining the broadest line of private brand tires. An important step for us in 1999 will be the opening of a distribution center in the Mid-Atlantic region, which will position us to better serve customers in that area and enable them, in turn, to enhance the service they provide to independent tire dealers."
DiPasqua noted, "An important component of our growth strategy remains using TBC's strong financial position to pursue strategic acquisitions and working partnerships that can lead to further expansion of our core operations. During 1998 we acquired the capital stock of Carroll's, Inc., our largest distributor. This transaction secured our control over the distribution of our tires directly to independent dealers in a major portion of the Southeast and Mid-Atlantic regions. We have already begun several new marketing programs intended to increase our penetration in these geographic areas. We also expect to realize some cost reductions during 1999 from the integration of the two organizations. Another transaction completed during 1998 included our participation in a joint venture to control 13 retail tire stores in Las Vegas. We plan to maintain a multi-branded marketing approach through these locations that is focused on building a loyal, growing base of customers."
DiPasqua noted, "This marked only the second full year in which Big O Tires has been included in our results. At the end of 1998, the Big O system encompassed 436 stores, up from 415 at the close of 1997. Our plans are to continue expanding the size of the Big O network. In that regard, during 1998 an agreement was signed with MFA Oil Company, a long-time wholesale customer, which is expected to lead to the opening of at least 30 Big O centers over the next five years.
"During 1998 we repurchased a total of 2.1 million shares to take advantage of what we believe was a sound investment of the Company's capital. We currently have the authorization from the Board of Directors to repurchase an additional 1.9 million shares. We are pleased that TBC's strong financial position enabled us to make these repurchases while continuing to support our overall strategy for growing our business."
TBC Corporation is one of the nation's largest marketers and distributors of products 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
Three Months Ended
December 31,
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1998 1997
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Net sales $ 165,816,000 $ 152,052,000
Income before income taxes 7,367,000 8,361,000
Income taxes 2,848,000 2,718,000
Net earnings $ 4,519,000 $ 5,643,000
Earnings per share
(basic and diluted) $ 0.21 $ 0.24
Average number of shares
outstanding (diluted) 21,207,000 23,441,000
Year Ended
December 31,
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1998 1997
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Net sales $ 646,135,000 $ 642,852,000
Income before income taxes 27,809,000 31,587,000
Income taxes 10,915,000 11,887,000
Net earnings $ 16,894,000 $ 19,700,000
Earnings per share
(basic and diluted) $ 0.75 $ 0.84
Average number of shares
outstanding (diluted) 22,481,000 23,571,000