ATD posts net loss on sales of $538 million
American Tire Distributors Holdings Inc. (ATD) posted a net loss of $3.2 million on net sales of $538 million for the first quarter ended April 4, 2009. That compares to net income of $1.7 million on sales of $511 million for the same period in 2008.
The 5.3% increase in net sales primarily was driven by two factors:
1. ATD's purchase of Am-Pac Tire Distributors Inc. in December 2008 (see "ATD acquires AM-PAC/Tire Pros," Dec. 19, 2008). The addition contributed $76.9 million to the quarter-over-quarter increase.
2. price increases. By passing along the multiple price increases initiated by tire manufacturers in 2008, ATD added $25.1 million to the sales figure.
The first-quarter increases were partially offset by soft tire unit sales and a decline in wheel and equipment sales, which were comparatively down $16.5 million. "Excluding AM-PAC Tire, our sales of passenger and light truck tire units continued to outperform the overall passenger and light truck tire market as measured by the RMA (Rubber Manufacturers Association)," says ATD.
The company adds that the $4.9 million net change in income is due, in part, to a $14.8 million increase in selling, general and administrative expenses, predominantly the result of ATD's acquisition of AM-PAC Tire.
ATD also recorded first-quarter operating income of $7.9 million, down 58% from 1Q 2008.