Tbc (NASDAQ:TBCC)
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TBC Reports Record First Quarter Sales and Earnings
PALM BEACH GARDENS, Fla., April 25 /PRNewswire-FirstCall/ -- TBC Corporation
(NASDAQ:TBCC), one of the nation's leading marketers of automotive replacement
tires, today reported record sales and earnings for the first quarter ended
March 31, 2005.
Net sales in the first quarter increased 7.5% to $466.4 million, compared to
$433.8 million in the prior-year period. Same store sales for TBC's retail
segment increased 2.7% in the first quarter of 2005. TBC's total unit tire
sales increased 3.1% in the first quarter of 2005, while unit shipments by tire
manufacturers were up 1.7% based on preliminary reports. Net income increased
12.9% to $6.2 million, or $0.27 per diluted share, in the current quarter,
versus $5.5 million, or $0.24 per diluted share, in the first quarter of 2004.
Larry Day, TBC President and Chief Executive Officer, commented, "During the
quarter, our retail operations benefited from growth in mechanical services and
stronger private brand penetration. However, retail performance was impacted by
increased spending, primarily for additional advertising, which did not produce
the level of sales we had anticipated in this seasonally slower time. We have
since adjusted this spending accordingly."
"Our wholesale business performed well in the first quarter and exceeded our
expectations. Stronger sales of specialty products sourced in China, as well as
robust buying activity driven by anticipated price increases, contributed to
wholesale's exceptional results," concluded Mr. Day.
At March 31, 2005, the Company had a combined total of 1,172 stores in its
retail network with 609 Company-operated locations and 563 franchised Big O
stores. In fiscal 2005, the Company expects to add 20 to 30 stores to its
Company-operated retail network and 15 to 20 new Big O franchise locations.
For the full year of 2005, the Company reiterates earnings guidance to be in
the range of $2.08 to $2.15 per diluted share. Earnings in the second quarter
are forecast to be in the range of $0.49 to $0.53 per diluted share.
TBC Corporation will host a conference call on Tuesday, April 26, 2005, at
10:00 a.m. Eastern time, to discuss first quarter 2005 results. A live Webcast
of the conference call will be available by visiting the Company's Web site,
http://www.tbccorp.com/. The Webcast will be archived at TBC's Web site until
May 24, 2005.
The Company also announces that it is delaying the mailing of its proxy
materials for the 2005 Annual Meeting of Stockholders to enable the Company to
include in its Annual Report to Stockholders the reports on internal control
over financial reporting required by Section 404 of the Sarbanes-Oxley Act of
2002. The Company believes that its Section 404 reports will be finalized
shortly and will not identify any material weakness. As a result, the Company
is rescheduling its Annual Meeting of Stockholders previously scheduled for May
12, 2005 to early June 2005.
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
RESTATED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
RESTATED
2005 2004
NET SALES $466,372 $433,841
COST OF SALES 292,268 271,975
GROSS PROFIT 174,104 161,866
EXPENSES:
Distribution expenses 18,890 17,966
Selling, administrative and
retail store expenses 141,983 131,949
Interest expense - net 4,951 4,102
Other (income) expense - net (1,433) (718)
Total expenses 164,391 153,299
INCOME BEFORE INCOME TAXES 9,713 8,567
Provision for income taxes 3,506 3,068
NET INCOME $6,207 $5,499
EARNINGS PER SHARE -
Basic $0.28 $0.25
Diluted $0.27 $0.24
Weighted Average Common Shares
Outstanding -
Basic 22,419 22,021
Diluted 23,386 23,256
TBC CORPORATION
RESTATED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
ASSETS
March 31, December 31,
2005 2004
(Unaudited) (Audited)
CURRENT ASSETS:
Cash and cash equivalents $1,433 $2,832
Accounts and notes receivable,
less allowance for doubtful
accounts of $8,823 at March 31, 2005
and $9,307 at December 31, 2004
Related parties 37,260 32,149
Other 127,818 117,812
Total accounts and notes
receivable 165,078 149,961
Inventories 298,087 291,745
Refundable federal and state
income taxes - -
Deferred income taxes 24,929 24,790
Other current assets 17,014 19,270
Total current assets 506,541 488,598
PROPERTY, PLANT AND EQUIPMENT, AT
COST:
Land and improvements 8,003 10,400
Buildings and leasehold
improvements 108,982 109,959
Furniture and equipment 107,483 105,232
224,468 225,591
Less accumulated depreciation 79,376 73,418
Total property, plant and
equipment 145,092 152,173
TRADEMARKS, NET 15,824 15,824
GOODWILL, NET 180,442 180,353
OTHER ASSETS 40,523 39,331
TOTAL ASSETS $888,422 $876,279
TBC CORPORATION
RESTATED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
2005 2004
(Unaudited) (Audited)
CURRENT LIABILITIES:
Outstanding checks, net $13,440 $30,368
Notes payable to banks 55,408 41,013
Current portion of long-term debt
and capital lease obligations 41,243 41,216
Accounts payable, trade 162,452 128,656
Federal and State Income Taxes Payable 1,773 17,790
Warranty reserves 19,516 19,667
Other current liabilities 73,245 71,278
Total current liabilities 367,077 349,988
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, LESS CURRENT PORTION 155,653 167,349
NONCURRENT LIABILITIES 43,016 43,320
DEFERRED INCOME TAXES 10,193 10,613
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common stock, $0.10 par value,
shares issued and outstanding -
22,445 at March 31, 2005
and 22,312 at December 31, 2004 2,244 2,231
Additional paid-in capital 30,260 28,882
Deferred compensation (1,205) (789)
Other comprehensive income (loss) (1,278) (1,570)
Retained earnings 282,462 276,255
Total stockholders' equity 312,483 305,009
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $888,422 $876,279
TBC CORPORATION
SUPPLEMENTARY DATA
(In thousands, except percentages and store counts)
(Unaudited)
Three Months Ended
March 31,
2005 2004
RECONCILIATION OF EBITDA TO NET INCOME:
EBITDA $21,664 $19,415
Less - Depreciation and
Amortization 7,000 6,746
Interest Expense - net 4,951 4,102
Provision for Income Taxes 3,506 3,068
NET INCOME $6,207 $5,499
SEGMENT INFORMATION:
NET SALES -
Retail $293,160 $283,141
Wholesale $173,212 $150,700
Consolidated $466,372 $433,841
EBITDA -
Retail $13,069 $12,673
Wholesale $8,595 $6,742
Consolidated $21,664 $19,415
CAPITAL EXPENDITURES $3,941 $6,846
RETAIL SAME-STORE SALES % CHANGE 2.7% 6.2%
RETAIL STORE COUNTS, at end of period
Company Operated Stores 609 596
Franchised Big O Stores 563 571
Total 1,172 1,167
DATASOURCE: TBC Corporation
CONTACT: Thomas W. Garvey, Executive V.P. & Chief Financial Officer of
TBC Corporation, +1-561-227-0955; or Investors, Betsy Brod or Jonathan
Schaffer, both of Brod & Schaffer, LLC, +1-212-750-5800
Web site: http://www.tbccorp.com/