Tbc (NASDAQ:TBCC)
Historical Stock Chart
From Jun 2019 to Jun 2024
TBC Corporation Announces Restatement of Accounting for Leases
and Reiterates Its Second Quarter Earnings Guidance
- Same Store Sales up 4.1% for the Second Quarter -
PALM BEACH GARDENS, Fla., July 25 /PRNewswire-FirstCall/ -- TBC Corporation
(NASDAQ:TBCC), one of the nation's leading marketers of automotive replacement
tires, announced today that following an analysis of its lease-related
accounting policies and in consultation with its Audit Committee and Board of
Directors, the Company will restate certain of its prior period financial
statements.
All adjustments will be non-cash, similar to those announced earlier this year
by many retail and restaurant companies and will not have any impact on:
* Previously reported cash flows, cash balances, sales or comparable
sales;
* Timing or amount of any actual lease payment or tax liability;
* Compliance with any financial covenant under its revolving credit
facility or other debt instruments;
* The current economic value of the Company's leaseholds or the
underlying value of the Company's real estate assets.
On July 21, 2005, after consulting with its Audit Committee and Board of
Directors, the Company determined that its financial statements from 2000 to
2004 and the first quarter of 2005 can no longer be relied upon and certain
prior periods should be restated. The adjustments will primarily affect the
Company's balance sheet accounts for goodwill and non-current liabilities; as
well as rent expense in prior periods. While the Company does not consider the
impact of correcting the previously issued financial statements to be material
with respect to any one period, the cumulative effect of the changes would be
material if recorded in the second quarter of 2005. Therefore, the Company
believes that a restatement of prior period financial statements is
appropriate.
As part of the restatement, the Company will adjust its computation of
straight-line rent expense and the related deferred rent liability on acquired
leases. Historically, when accounting for acquired leases, the Company
evaluated the lease term in order to determine the period over which to record
straight-line rents. After performing this assessment, the Company recorded a
deferred rent liability at the date of acquisition. Management has determined
that the Company should have eliminated the deferred rent liability on its
acquired leases upon acquisition. Consequently, the Company's straight-line
rent expense was understated.
The Company will report an increase in same-store sales of 4.1% for the second
quarter of 2005 and expects to report earnings in line with its previously
announced guidance of $.49 to $.53 per diluted share. Once the Company and its
Audit Committee finalizes the impact of the restatement, the Company will
release second quarter earnings and hold a conference call to discuss the
quarter and outlook for the balance of the year.
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.
DATASOURCE: TBC Corporation
CONTACT: TBC Corporation - Thomas W. Garvey, Executive V.P. & Chief
Financial Officer, +1-561-227-0955; or Investors - Betsy Brod/Jonathan
Schaffer, both of Brod & Schaffer, LLC +1-212-750-5800
Web site: http://www.tbccorp.com/