AKRON—A mixed bag of financial results summarizes the performances of several tire manufacturing and tire-related companies for the fourth quarter ended Dec. 31 and the year. Of the following half-dozen firms, five had a profitable 1998, with two seeing record sales and earnings.
Retreading materials and equipment maker Bandag Inc.'s fourth quarter and 1998 results ``modestly exceeded expectations,'' said Chairman and CEO Martin G. Carver.
The Muscatine, Iowa-based firm's consolidated 1998 net earnings sank 51.4 percent to $59.3 million compared with 1997 when it reported consolidated net earnings of $122.0 million. The 1998 results included non-recurring charges of approximately $1.2 million for what the company said was facility closure and other restructuring costs.
Sales grew 28.8 percent to $1.06 billion.
Bandag's fourth-quarter consolidated net earnings plummeted 72.3 percent to $18.5 million vs. $66.9 million in 1997. That amount included a non-recurring gain of approximately $55.8 million after taxes on the sale of marketable equity securities.
Consolidated net sales for the 1998 fourth quarter rose 7 percent to $275.0 million, compared to $256.0 million the year earlier.
The company said its fourth quarter performance was affected, in part, by its Tire Distribution Systems Inc. (TDS) subsidiary, which acquired several commercial tire dealerships in 1997 and 1998.
Although TDS saw net sales of $94.8 million in the 1998 fourth quarter, it posted a loss of $635,000 before interest and taxes. That, nonetheless, was an improvement over the $1.98 million it lost while in operation for a limited time during the same 1997 period.
TDS had 1998 profits of $2.5 million on sales of $376.6 million.
Cooper Tire & Rubber
Fortified by a record fourth quarter, Cooper Tire & Rubber Co. finished 1998 with record sales and earnings.
Relatively stable tire pricing in the fourth quarter, combined with favorable raw material pricing, helped the Findlay, Ohio, tire maker finish the year with record net income of $127 million, a 3.7-percent gain over 1997.
Sales jumped 3.5 percent over the previous year to reach $1.88 billion.
Pushed by fourth quarter sales that grew 1.5 percent to $496.2 million, Cooper recorded a record $38.1 million in profits in the period—10 percent higher than the $34.6 million reported in 1997.
Chairman/CEO Patrick W. Rooney said Cooper's tire operations benefited from new private label business that came on-stream in the fourth quarter, ``strong sales in our proprietary brands and excellent market reception to our new premium touring radial tire. These achievements largely offset our previously reported lower sales to a large private brand customer.''
``Weak emerging markets, volatile foreign currencies and brutal competitive actions'' made 1998 a challenging year for Goodyear, said Chairman and CEO Samir G. Gibara.
Still, the Akron tire manufacturer tallied profits of $682.3 million for the year, up 22.1 percent over 1997's of $558.7 million. Net sales dropped 3.4 percent from the previous year to $12.6 billion, impacted by foreign currency translations that totaled about $470 million. That, Goodyear said, offset its strategic revenue growth programs.
Worldwide, the company's tire unit sales grew 1.7 percent in 1998 with North American units climbing 2.3 percent and international units up .9 percent.
For the quarter, worldwide tire sales rose 1.8 percent; North American tire units grew 2.6 percent while international units increased .9 percent, reflecting strong replacement market sales, the company said.
In the fourth quarter Goodyear earned $121.5 million vs. $2 million for the year-earlier period, with the 1998 gain including the sale of assets of $6.5 million after taxes.
The 1997 fourth quarter included income of $6.3 million from the discontinued Celeron operations and a charge for business rationalization of $176.3 million.
Although the North American tire segment's quarterly and annual results included higher unit sales, Goodyear said they reflected continuing pricing pressures. Operating income for both periods decreased due to costs associated with the transition to seven-day operations at certain production facilities and the consolidation of warehouse operations.
Myers Industries Inc.
Myers Industries Inc., parent of Myers Tire Supply and Patch Rubber Co., reported record sales and earnings for the fourth quarter and year.
The company's 1998 net income grew 28.4 percent to $28.7 million vs. $22.3 million in 1997. Net sales for the year rose 15.4 percent to $392 million compared with $339.6 million the previous year.
Net income for the fourth quarter was $9.17 million, a 10.7-percent increase over the firm's 1997 results. Sales for the quarter grew 15.7 percent to $110.5 million compared with $95.5 million.
The company—a diversified manufacturer of polymer and metal products for industrial, commercial and consumer markets and a nationwide wholesale distributor of tire repair and undercar service products—had ``an exceptional year,'' said President and CEO Stephen E. Myers. Myers completed four acquisitions in 1998.
Despite higher sales for the fourth quarter and year, TBC Corp. recorded declines in earnings for both periods.
Net sales for 1998 rose slightly to $646.1 million compared with $642.9 million in 1997. Profits, meanwhile, dipped 14.2 percent to $16.9 million compared with $19.7 million a year ago.
For the final quarter, net income totaled $4.5 million, a 19.9-percent drop from $5.6 million in the year earlier. Sales for the period rose 9 percent to $165.8 million compared with $152.1 million in 1997.
Louis S. DiPasqua, TBC's vice chairman/CEO, said the fourth quarter and second-half results, ``as a whole, reflected a clear upswing in our operating momentum.
``A primary goal we set for 1998 was to enhance the value TBC offers to customers. The full implementation of our Advantage 2000 marketing program proved very successful in increasing business with existing accounts as well as in supporting our initiatives to expand TBC's customer base.''
This year, he continued, TBC will open a distribution center in the Mid-Atlantic region, ``which will position us to better serve customers in that area and enable them, in turn, to enhance the service they provide to independent tire dealers.''
Coming on the heels of news that Treadco Inc.'s former parent was interested in buying the remaining outstanding shares of the firm it doesn't already own, Fort Smith, Ark.-based Treadco reported net income of $6.4 million for 1998 compared with a net loss of $2.5 million in 1997.
The firm posted $181.3 million in total sales for 1998, a 12.4-percent hike from 1997. New tires accounted for about half of sales, with retreads representing 39 percent and services the rest.
In the fourth quarter, Treadco's net income was $5.5 million compared with a net loss of $983,000 during the same 1997 period.
However, Treadco received nearly $10 million during the fourth quarter from its settlement with Bandag Inc. over a dispute involving the companies' former franchise relationship. On an after-tax basis, this payment increased Treadco's fourth quarter net income by approximately $5.4 million.
Treadco's retread sales increased 5.5 percent during the fourth quarter to $17.2 million. New-tire sales jumped 12.6 percent for the same period to $22.7 million.
Arkansas Best, Treadco's former parent, reported fourth quarter net income of $9.6 million compared with $4.9 million net income during 1997's fourth. For the year, it had record net income of $28.7 million, compared with $21 million in 1997.