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Heafner Reports First Quarter Sales and Earnings

15 May 2000

Heafner Reports First Quarter Sales and Earnings

    CHARLOTTE, N.C.--May 15, 2000--Heafner Tire Group, Inc. today announced its operating results for the quarter ended March 31, 2000.
    Net sales for the quarter ended April 1, 2000 totaled $254.4 million, an increase of $15.0 million, or 6.3%, from sales in the first quarter of 1999 of $239.4 million. Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $6.6 million in the quarter ended March 31, 2000, a decrease of $0.7 million, or 9.1%, from $7.3 million in the first quarter of 1999.
    "The financial performance in the first quarter of 2000, although lower than in the same period last year, is very close to our operating plan," said Donald C. Roof, President and CEO. "We expected that first quarter earnings would be impacted by start up costs of our new Southern California distribution facility and other costs associated with the many initiatives underway at Winston. We continue to believe that these expansions and initiatives will lead to higher sales and profitability in 2000. Our continued focus on effective working capital management has resulted in reductions in working capital levels during the quarter."
    Mr. Roof also stated, "We recently announced that Heafner had reached an agreement to merge with the operations of T.O. Haas Tire Company, Inc. T.O. Haas Tire, located in Lincoln, Nebraska, has been the premier distributor of tires and related products in the central part of the country since it was founded in 1947 and enjoys an excellent reputation for the quality of its employees, products and services. We are excited about this opportunity to expand into new territories in our continuing effort to consolidate the industry in the United States. This transaction will add more than $100 million in annual revenues to Heafner Tire Group, and we expect it to close at the end of this month."
    

                       Heafner Tire Group, Inc.
                         Financial Highlights
                            ($ in millions)


                                               Quarter ended
 
                                          4-1-00            3-31-99
                                          ------            -------
      Reported Results:
              Net Sales                   $254.4             $229.4
              EBITDA                         6.6                7.3

    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.