ENGLEWOOD, Colo.-Riding the success of its Cost-U-Less marketing program, Big O Tires Inc. reported record fourth-quarter earnings and substantially higher net income for the fiscal year, ended Dec. 31. Fourth-quarter earnings more than doubled to $1.24 million compared with $608,000 for the same period in 1993, the company said. That helped boost total annual profits 68.7 percent to $2.69 million compared with $1.6 million for 1993.
The Cost-U-Less program, instituted midway through 1994, rolled back prices on all Big O-brand tires. The company said it proved to be a ``major factor'' behind a sales boost of $6.1 million during the last half of the year compared with the year-earlier period.
Sales for the year totaled $127.7 million, an increase of 3.8 percent over 1993. For the fourth quarter, Big O's sales jumped 16.3 percent to $33.5 million.
The firm reported a non-recurring charge of $391,000 associated with a shareholder proposal adopted in June 1994, which mandated the firm hire an investment banker to examine ways to maximize shareholder value, including the possible sale of the Englewood-based company.
Big O's selling, general and administrative expenses, before non-recurring charges, decreased by $463,000, it said, a 2.4-percent decline from 1993.
It called 1994 ``a pivotal year'' in its ``quest to grow.'' Given Big O's current restructuring program and new management triumverate (See TIRE BUSINESS, Feb. 20, page 1), the company said it ``intends to . . . continue to grow its franchised dealer network,'' take advantage of the economies of scale the system can provide, as well as ``continue to emphasize programs to improve profit potential.''
One of North America's largest independent retail tire and auto service franchisers, Big O has 379 stores in 18 states, primarily in the West and Midwest. The company also distributes tires and automotive products to 40 associated dealers in British Columbia.