Heafner Reports Improved Sales and Earnings
16 November 1999
Heafner Reports Improved Sales and Earnings
CHARLOTTE, N.C.--Nov. 15, 1999--Heafner Tire Group, Inc. today announced its operating results for the quarter ended September 30, 1999.Net sales for the quarter ended September 30, 1999 totaled $267.4 million, an increase of $19.1 million, or 7.7%, from sales in the third quarter of 1998 of $248.3 million. Total sales for the nine months ended September 30, 1999 reached $773.2 million, an increase of $281.7 million, or 57.3%, from sales of $491.5 million in the same period of 1998. Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $10.6 million in the quarter ended September 30, 1999, an increase of $1.7 million, or 19.1%, from $8.9 million in the third quarter of 1998. EBITDA for the first nine months of 1999 totaled $29.8 million, an increase of $13.2 million, or 79.5%, from $16.6 million in the first nine months of 1998.
"We are pleased with our financial performance in the third quarter," said Donald C. Roof, President and CEO. "Once again we achieved solid operating results in both the Southeast and California. Although the increase in sales was assisted by acquisitions that we have made over the past year, the underlying sales increases at our divisions, as reflected in the pro forma comparisons, were higher than the overall industry growth rate. Third quarter distribution sales in the Southeast were adversely affected by both weather and system conversions in the integration of Itco and Heafner. We have introduced new interactive electronic tools for our customers to assist them in their operations, and to streamline the product order process. In addition, we are installing new point-of-sale systems in our Winston retail stores to improve our ability to serve customers quickly and efficiently. We continue to expect that sales will exceed $1 billion in 1999."
Mr. Roof also stated, "The Company continues to improve its earnings and EBITDA margins which reflects the positive benefits of bringing together strong companies over the past two years. We believe that our underlying sales growth will outperform the industry growth rate and the rate of earnings growth will continue to exceed the level of sales growth. The recently completed acquisition of a 17-store tire retailer in Southern California will bring new territories and opportunities to Winston Tire, and is an integral part of our plan to improve sales and earnings in our retail segment. In addition, we expect that the recently announced expansion of California Tire into Southern California will increase our western distribution capabilities."
Heafner Tire Group, Inc. is the country's largest independent marketer of tires and tire-related products. The Company includes Heafner-Itco Tires & Products in the Southeast, and Competition Parts Warehouse (CPW), Winston Tire, and California Tire, in California and Arizona. It operates over 60 distribution centers and 210 retail tire and auto service stores, and has revenues in excess of $1 billion. For information contact David H. Taylor, CFO at (704) 423-8989.
Heafner Tire Group, Inc.
Financial Highlights
($ in millions)
Quarter ended Nine Months ended
9-30-99 9-30-98 9-30-99 9-30-98
Reported Results:
Net Sales $267.4 $248.3 $773.2 $491.5
EBITDA(1) 10.6 8.9 29.8 16.6
Pro Forma Results(2):
Net Sales $267.4 $258.1 $773.2 $727.4
EBITDA(3) 10.6 9.3 29.8 24.6
(1) - results exclude special, nonrecurring and extraordinary charges.
(2) - results assume that the inclusion of ITCO, CPW, and Cal Tire occurred on January 1, 1998. CPW was acquired by Heafner on May 20, 1998, the merger with ITCO also occurred on May 20, 1998, and the acquisition of Cal Tire occurred on January 12, 1999. Certain reclassifications of acquired retail stores are reflected in 1998 results.
(3) - no adjustments have been recorded for unrealized synergies in these amounts. Adjustments have been made in 1998 reflecting the pro-forma handling of certain vendor rebates.
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, as well as general economic conditions and competition in the industry. 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.