TBC Corporation Reports 16% Gain in Second Quarter Sales
26 July 1999
TBC Corporation Reports 16% Gain in Second Quarter Sales; Earnings Per Share Excluding Special Charge Up 50%
MEMPHIS, Tenn.--July 26, 1999--TBC Corporation today reported results for the three months ended June 30, 1999 that included record second-quarter sales and net income, excluding a special charge.Income for the second quarter, excluding the special charge, rose 38% to $5.1 million, or $0.24 per share, compared with net income $3.7 million, or $0.16 per share, in the second quarter of last year. During the second quarter, the Company recognized an after-tax charge of $2.8 million, or $0.13 per share, related to the write-off of a note receivable from a former distributor that had been the subject of litigation since 1989. Net sales for the second quarter increased 16% to $187.7 million compared with $161.9 million in the year-earlier period.
Income for the first half, excluding the special charge, rose 30% to $8.9 million, or $0.42 per share, compared with net income of $6.9 million, or $0.30 per share, in the first half of 1998. Net sales for the first half increased 16% to $349.9 million compared with $302.7 million in the year-earlier period.
"Our results from operations for the second quarter before the special charge reflect a gratifying extension of the progress that we achieved in the first three months," remarked Louis S. DiPasqua, Vice Chairman and Chief Executive Officer. "We are very encouraged by the underlying momentum in our marketing program which is helping us advance within an admittedly competitive industry environment. Apart from the record net sales for the second quarter, the 10.2% gain in unit shipments of tires for the period is a tangible measure of the success of our plan. We are being aided significantly in this expansion by the contribution of Carroll's, Inc. that we acquired in November 1998. The positive return from this investment through the first six months reinforces our interest in other strategic acquisitions that can further strengthen TBC's fundamental business position.
"We are increasingly viewing TBC's basic role as a marketing organization that uses a variety of channels to provide purchasers of replacement tires with value brands and superior service. The most dynamic of those avenues at present is our expanding chain of Big O retail tire and automotive service stores. The Big O system currently encompasses 439 stores, up from 417 a year ago. We have an aggressive longer term plan for adding additional Big O locations, through our internal efforts and joint ventures such as the one with MFA Oil Company that was initiated a year ago."
DiPasqua concluded, "TBC has the advantage of a sound balance sheet and clearly established leadership in our targeted portion of the replacement tire market. Based on the combined sales of our four primary brands, we are more than twice the size of the second-largest factor in the private brand segment. This underlying stability of demand for replacement tires, coupled with our long-term performance record, makes us confident about TBC's growth potential."
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
June 30,
-------------------------------------
1999 1998
--------------- --------------
Net sales $187,664,000 $161,923,000
Income before income taxes 3,980,000 6,159,000
Income taxes 1,670,000 2,440,000
Net earnings $ 2,310,000(a) $ 3,719,000
Earnings per share (basic
and diluted) $ 0.11(a) $ 0.16
Average number of shares
outstanding 21,192,000 23,153,000
Six Months Ended
June 30,
------------------------------------
1999 1998
--------------- ---------------
Net sales $349,866,000 $ 302,658,000
Income before income taxes 10,243,000 11,276,000
Income taxes 4,127,000 4,407,000
Net earnings $ 6,116,000(a) $ 6,869,000
Earnings per share (basic
and diluted) $ 0.29(a) $ 0.30
Average number of shares
outstanding 21,187,000 23,188,000
(a) Results for the three and six months ended June 30, 1999 include
an after-tax charge of $2.8 million, or $0.13 per share, related
to the write-off of a note receivable from a former distributor
that had been the subject of litigation since 1989.