TBC Reports Record Third Quarter Sales and Earnings

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, [phone]; Investors - Betsy Brod or Jonathan Schaffer,

both of Brod & Schaffer, LLC, [phone]



Web site:  http://www.tbccorp.com/ 

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