Bandag subsidiary reports net sales of $365 million
Tire Distribution Systems Inc. (TDS), a subsidiary of Bandag Inc., recorded sales of nearly $365 million in 2002.
TDS sales were down 9% compared to 2001's $398.9 million total. Bandag cited soft market conditions and the loss of several significant customers, most notably Consolidated Freightways (which declared bankruptcy) as largely responsible for the decline.
In the fourth quarter, TDS reported net sales of $81.2 million, some 16% lower than the same period in 2001. The decrease is only 12% lower on a same store basis after adjusting for the sale of nine commercial locations across Tennessee, Alabama and Georgia to independent Bandag dealers, and two retail locations in other markets.
Sales from the locations divested and closed during the year totaled approximately $34 million and $42 million for the years 2002 and 2001, respectively.
"Even though Bandag's distribution subsidiary, Tire Distribution Systems Inc., faced several challenges during the year, as a result of divestitures and other strategic actions, it emerged by year-end as a smaller, more efficient operation within the Bandag Strategic Alliance," says Martin Carver, Bandag's chairman and CEO.
TDS' operating loss was $11.4 million last year, compared to a reported loss of $11.1 million in 2001.
Bandag adopted SFAS 142 on Jan. 1, 2002. The change in accounting method resulted in the discontinuation of the amortization of goodwill and other expenses. Without the accounting change, which affects the last two fiscal years, TDS' loss was $2.8 million in 2001 (excluding amortization of goodwill).
TDS recorded margin improvements of two percentage points for the fourth quarter vs. 12 months prior, and one percentage point for the full year compared to 2001.
As a corporation, Bandag reported consolidated net income of $2.8 million on net sales of $900.5 million for 2002.