PALM BEACH GARDENS, Fla., Oct. 31 /PRNewswire-FirstCall/ -- TBC
Corporation (NASDAQ:TBCC), one of the nation's leading marketers of
automotive replacement tires, today reported sales and earnings for
the third quarter ended September 30, 2005 that were in line with
the Company's previous guidance. Net sales in the third quarter
increased 9.5% to $521.6 million, compared to $476.5 million in the
prior-year period. Same store sales for TBC's retail segment
increased 4.9% in the third quarter of 2005. TBC's total unit tire
sales increased 1.2% in the third quarter of 2005, while unit
shipments by tire manufacturers increased 2.4% based on preliminary
reports. Net income increased 41.1% to $15.3 million, or $0.65 per
diluted share, in the recent quarter, versus $10.8 million, or
$0.47 per diluted share, in the third quarter of 2004. Earnings in
the third quarter of 2004 included a negative impact of $0.12 per
diluted share due to four major hurricanes. Larry Day, TBC
President and Chief Executive Officer, commented, "Results for the
third quarter were in-line with our previously disclosed guidance
for the period. Additionally, we are on track to complete the
proposed sale of TBC Corporation to Sumitomo Corporation of America
by the end of the year as previously announced on September 19,
2005, subject to receipt of stockholder approval and required
regulatory clearance." For the nine months ended September 30,
2005, net sales rose 7.6% to $1,470.3 million compared to $1,366.8
million last year. Total unit tire sales increased 1.2% compared to
an industry increase of 3.0%, based on preliminary reports. Retail
same-store sales increased 3.9% in the first nine months of 2005.
Net income grew 32.3% to $33.4 million, or $1.43 per diluted share,
versus $25.3 million, or $1.09 per diluted share, reported a year
ago. Reported results for the first nine months of 2004 reflect the
$0.12 per diluted share negative impact from the four hurricanes as
well as the negative impact of EITF 02-16 of $0.08 per diluted
share related to a purchase agreement with a major supplier. At the
end of the third quarter, the Company had a combined total of 1,174
stores in its retail network with 616 Company-operated locations
and 558 franchised Big O stores. The Company has made an initial
assessment relative to the financial effects on the business as a
result of the recent hurricane activity. There are approximately
thirty-three (33) stores that are currently not operational, mostly
due to power outages. The Company continues to monitor the
situation on a daily basis and does not believe the impact on the
fourth quarter financial results will be material. For the full
year of 2005, the Company expects earnings to be in the range of
$2.00 to $2.05 per diluted share. Earnings in the fourth quarter of
2005 are forecast to be in the range of $0.57 to $0.62 per diluted
share. About TBC: TBC Corporation is one of the nation's largest
marketers of automotive replacement tires through a multi-channel
strategy. The Company's retail operations include company-operated
retail centers under the "Tire Kingdom", "Merchant's Tire &
Auto Centers" and "National Tire & Battery" brands and
franchised retail tire stores under the "Big O Tires" brand. TBC
markets on a wholesale basis to regional tire chains and
distributors serving independent tire dealers throughout the United
States and in Canada and Mexico. The Company's proprietary brands
of tires have a longstanding reputation for quality, safety and
value. TBC Corporation Safe Harbor Statement This document contains
"forward-looking statements," as that term is defined under the
Private Securities Litigation Reform Act of 1995, regarding
expectations for future financial performance, which involve
uncertainty and risk. It is possible that the Company's future
financial performance may differ from expectations due to a variety
of factors including, but not limited to: changes in economic and
business conditions in the world; increased competitive activity;
consolidation within and among competitors, suppliers and
customers; unexpected changes in the replacement tire market; the
Company's inability to attract as many new franchisees or open as
many distribution outlets as stated in its goals; changes in the
Company's ability to identify and acquire additional companies in
the replacement tire industry and successfully integrate
acquisitions and achieve anticipated synergies or savings;
fluctuations in tire prices charged by manufacturers, including
fluctuations due to changes in raw material and energy prices,
changes in interest and foreign exchange rates; the cyclical nature
of the automotive industry and the loss of a major customer or
program. It is not possible to foresee or identify all such
factors. Any forward-looking statements in this release are based
on certain assumptions and analyses made by the Company in light of
its experience and perception of historical trends, current
conditions, expected future developments and other factors it
believes are appropriate in the circumstances. Prospective
investors are cautioned that any such statements are not a
guarantee of future performance and actual results or developments
may differ materially from those projected. The Company makes no
commitment to update any forward-looking statement included herein,
or to disclose any facts, events or circumstances that may affect
the accuracy of any forward-looking statement. 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
CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share
amounts) (Unaudited) Three Months Ended Nine Months Ended September
30, September 30, (Restated) (Restated) 2005 2004 2005 2004 NET
SALES $521,597 $476,464 $1,470,344 $1,366,795 COST OF SALES 328,884
301,503 920,920 856,587 GROSS PROFIT 192,713 174,961 549,424
510,208 EXPENSES: Distribution expenses 20,541 17,754 58,705 52,690
Selling, administrative and retail store expenses 145,289 137,762
428,398 407,845 Interest expense - net 4,563 4,690 14,546 13,895
Other (income) expense - net (1,836) (1,904) (4,854) (3,275) Total
expenses 168,557 158,302 496,795 471,155 INCOME BEFORE INCOME TAXES
24,156 16,659 52,629 39,053 Provision for income taxes 8,891 5,839
19,227 13,802 NET INCOME $15,265 $10,820 $33,402 $25,251 EARNINGS
PER SHARE - Basic $0.68 $0.49 $1.49 $1.14 Diluted $0.65 $0.47 $1.43
$1.09 Weighted Average Common Shares Outstanding - Basic 22,476
22,254 22,431 22,159 Diluted 23,513 23,237 23,439 23,274 TBC
CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
(Unaudited) ASSETS September 30, December 31, 2005 2004 (Unaudited)
(Audited) CURRENT ASSETS: Cash and cash equivalents $1,685 $2,832
Accounts and notes receivable, less allowance for doubtful accounts
of $10,961 at September 30, 2005 and $9,307 at December 31, 2004
Related parties 26,217 32,149 Other 140,340 117,812 Total accounts
and notes receivable 166,557 149,961 Inventories 300,651 291,745
Refundable federal and state income taxes 2,812 - Deferred income
taxes 27,099 24,790 Other current assets 14,549 19,270 Total
current assets 513,353 488,598 PROPERTY, PLANT AND EQUIPMENT, AT
COST: Land and improvements 7,444 10,400 Buildings and leasehold
improvements 110,275 110,478 Furniture and equipment 111,100
105,232 228,819 226,110 Less accumulated depreciation 90,129 73,662
Total property, plant and equipment 138,690 152,448 TRADEMARKS, NET
15,824 15,824 GOODWILL, NET 173,528 168,552 OTHER ASSETS 42,069
39,331 TOTAL ASSETS $883,464 $864,753 TBC CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) LIABILITIES
AND STOCKHOLDERS' EQUITY September 30, December 31, 2005 2004
(Unaudited) (Audited) CURRENT LIABILITIES: Outstanding checks, net
$22,601 $30,368 Notes payable to banks 75,204 41,013 Current
portion of long-term debt and capital lease obligations 17,610
41,216 Accounts payable, trade 120,892 128,656 Federal and State
Income Taxes Payable - 17,790 Warranty reserves 19,146 19,667 Other
current liabilities 85,474 71,278 Total current liabilities 340,927
349,988 LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, LESS CURRENT
PORTION 155,111 167,349 NONCURRENT LIABILITIES 36,836 34,383
DEFERRED INCOME TAXES 12,514 10,366 COMMITMENTS AND CONTINGENCIES -
- STOCKHOLDERS' EQUITY: Common stock, $0.10 par value, shares
issued and outstanding - 22,470 at June 30, 2005 and 22,312 at
December 31, 2004 2,248 2,231 Additional paid-in capital 30,667
28,882 Deferred compensation (1,028) (789) Other comprehensive
income (loss) (1,126) (1,570) Retained earnings 307,315 273,913
Total stockholders' equity 338,076 302,667 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $883,464 $864,753 TBC CORPORATION
SUPPLEMENTARY DATA (In thousands, except percentages and store
counts) (Unaudited) Three Months Ended Nine Months Ended September
30, September 30, (Restated) (Restated) 2005 2004 2005 2004
RECONCILIATION OF EBITDA TO NET INCOME: EBITDA $35,160 $27,766
$87,570 $72,947 Less - Depreciation and Amortization 6,441 6,417
20,395 19,999 Interest Expense - net 4,563 4,690 14,546 13,895
Provision for Income Taxes 8,891 5,839 19,227 13,802 NET INCOME
$15,265 $10,820 $33,402 $25,251 SEGMENT INFORMATION: NET SALES -
Retail $323,502 $308,081 $931,965 $892,452 Wholesale 198,095
168,383 538,379 474,343 Consolidated $521,597 $476,464 $1,470,344
$1,366,795 EBITDA - Retail $21,160 $18,481 $53,668 $46,389
Wholesale 14,000 9,285 33,902 26,558 Consolidated $35,160 $27,766
$87,570 $72,947 CAPITAL EXPENDITURES $3,894 $3,824 $12,964 $18,116
RETAIL SAME-STORE SALES % CHANGE 4.9% -1.7% 3.9% 1.7% RETAIL STORE
COUNTS, at end of period Company Operated Stores 616 602 Franchised
Big O Stores 558 569 Total 1,174 1,171 DATASOURCE: TBC Corporation
CONTACT: Thomas W. Garvey, Executive V.P. & Chief Financial
Officer, TBC Corporation, +1-561-227-0955; Investors - Betsy Brod
or Jonathan Schaffer, both of Brod & Schaffer, LLC,
+1-212-750-5800 Web site: http://www.tbccorp.com/
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