TBC Corp. posted net income of $10.9 million on net sales of $476.5 million for the third quarter ended Sept. 30, 2004. That compares to income of $10 millon on sales of $362.4 million for the same period last year, or gains of 9% and 31.5%, respectively.
TBC also reported the following third-quarter results:
* a 9.9% increase in total unit tire sales vs. the third quarter of 2003. Based on preliminary results, industry shipments were down 3.6% by comparison.
* a decline of 1.7% in same store sales for TBC’s retail segment, primarily due to the effects of Hurricanes Charley, Frances, Ivan and Jeanne.
* a decline in wholesale unit sales. The company’s wholesale business "generated improved profitability for the quarter due to favorable pricing and sales mix, as well as aggressive cost containment, despite a decline in unit sales," according to the company.
TBC says inclement weather in Florida and the eastern United States affected its retail business. However, its NTB company-owned stores performed in line with company expectations.
"In a retail environment that remains challenging and despite unprecedented hurricane activity, we delivered strong top- and bottom-line growth over last year," says CEO and President Larry Day. "We see opportunities at our retail locations for upside in both pricing and product/service mix.
"Additionally, we expect a solid fourth-quarter contribution from NTB.... However, overall retail demand for tires continues to be challenging due to the short-term effects of higher gasoline prices. As a result, we have adjusted our fourth-quarter and full-year outlook to reflect these market factors."
For the first nine months of fiscal 2004, TBC´s net income grew 13% to $25.6 million, while net sales rose 44.2% to $1.36 billion. Total unit tire sales increased 19.1%, while same store sales for the retail segment increased 1.7%.
(The results for 2003 have been restated to reflect the company-wide adoption of the FIFO inventory costing method.)
As of Sept. 30, 2004, TBC had a combined total of 1,171 stores in its retail network (602 Tire Kingdom and NTB company-owned stores, 569 Big O franchised outlets). That represents a 28% increase in the company’s store base, or 253 locations, since Sept. 30, 2003.
Exclusive of any further acquisitions, TBC expects to add an additional 11 retail locations in the last quarter of 2004.
TBC Corp. will host a conference call on Tuesday, Oct. 26, 2004, at 10 a.m. EST to discuss third-quarter results.
TBC´s stock price closed at $20.06 today on NASDAQ, a 52-week low.
