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ATD increases sales 24%, but posts 1Q loss

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American Tire Distributors Holdings Inc. posted a net loss of nearly $7.1 million on net sales of $794.1 million for the first quarted ended March 31, 2012. That compares to a loss of $5.5 million on sales of $640.8 million for the same 13-week period last year.

The company recorded operating income of $4.9 million, a 32.2% drop versus 1Q 2011.

ATD says growth in the U.S. replacement tire market will continue to be driven by favorable underlying dynamics, including:

* increases in the number and average age of passenger cars and light trucks;

* increases in the number of miles driven;

* increases in the number of licensed drivers as the U.S. population continues to grow;

* increase in the number of replacement tire SKUs;

* growth of the high performance tire segment; and

* shortening tire replacement cycles due to changes in product mix that increasingly favor high performance tires, which have shorter average lives.

"Despite the current market environment, we have a solid infrastructure, an extensive and efficient distribution network, and a broad product offering," says the company. "Our growth strategy, coupled with our access to capital and our scalable platform, enables us to continue to expand in existing markets as well as in new geographic areas. In addition, we are investing in technology and new sales channels which will help fuel our future growth.

"As a result, we believe that we are well positioned to continue to achieve above market results in both contracting and expanding market demand cycles."

In the first three months of 2012, ATD opened new distribution centers in Long Island, N.Y., and Milwaukee, Wis. "We will continue to evaluate additional geographic markets during 2012 and beyond."

ATD estimates its share of the replacement passenger and light truck tire market in the United States is approximately 10%, up from approximately 1% in 1996. In fiscal 2011, ATD's largest customer and top 10 customers accounted for less than 1.9% and 8.7%, respectively, of net sales.

For more information, click on "ATD reached $3 billion in sales in 2011."

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