TBC Reports Record Sales and Earnings for Third Quarter
25 October 1999
TBC Reports Record Sales and Earnings for Third Quarter; Expects Full Year 1999 Results to Show Gains
MEMPHIS, Tenn.--Oct. 25, 1999--TBC Corporation (Nasdaq/NM:TBCC) today reported results for the three months ended September 30, 1999 that included record third-quarter sales and net income.Income for the third quarter rose 19% to $6.6 million compared with net income of $5.5 million in the third quarter of last year. Earnings per share increased 24% to $0.31 per share versus $0.25 per share. Net sales for the third quarter increased 18% to $210.5 million compared with $177.7 million in the year-earlier period.
The third quarter results brought income for the nine months to $15.5 million, or $0.73 per share, excluding 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 income for the first nine months of 1998 totaled $12.4 million, or $0.54 per share. Net sales for the nine months of 1999 increased 17% to $560.3 million, compared with $480.3 million in the year-earlier period.
Larry Day, President and Chief Executive Officer, remarked, "TBC's strong performance for the third quarter represents a continuation of the progress we demonstrated in the first half. Our unit shipments of tires are up 10% through the nine months. This increase includes a benefit from the acquisition of a distributor in November 1998 but also importantly marks success in increasing our business with existing customers.
"Our third-quarter results highlight the distinctive competitive position that TBC commands in the replacement tire market. Independent tire dealers remain the dominant marketing force in the replacement tire industry, and TBC consistently achieves superior rankings in overall service to these dealers. Our ability to provide the broadest line of passenger and truck tires, excellent fill rates and value pricing are enabling us to increase our market share in what admittedly is a very competitive environment. We also are aggressively pursuing other opportunities to broaden our marketing channel. We are continuing to expand the number of locations within our Big O Tire system by adding individual locations and have the potential to increase our direct retail presence further through joint ventures, strategic alliances and acquisitions.
"Based on our results through the first nine months, we believe that net sales and net income, excluding the special charge, will mark significant gains for 1999 as a whole compared with 1998. The outlook for the replacement tire industry appears very favorable based on the high level of new vehicle sales in recent years. Our challenge is to capitalize on this opportunity by building on our positive momentum with innovative marketing programs and solid execution of our operating plan."
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,
1999 1998
Net sales $210,469,000 $177,661,000
Income before income taxes 10,712,000 9,166,000
Income taxes 4,155,000 3,660,000
Net earnings $ 6,557,000 $ 5,506,000
Earnings per share (basic and diluted) $ 0.31 $ 0.25
Average number of shares
outstanding 21,194,000 22,347,000
Nine Months Ended
September 30,
1999 1998
Net sales $560,335,000 $480,319,000
Income before income taxes 20,955,000 20,442,000
Income taxes 8,282,000 8,067,000
Net earnings $ 12,673,000(a) $ 12,375,000
Earnings per share (basic and diluted) $ 0.60(a) $ 0.54
Average number of shares
outstanding 21,189,000 22,906,000
(a) Results for the nine months ended September 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.