MUSCATINE, Iowa (July 26, 2000) — Bandag Inc. reported improved earnings for the second quarter and half year, despite slightly lower sales from the year-earlier periods.
The company attributed the improved earnings to "significant operating expense reductions" and an April price increase that partially offset rising raw materials costs.
On a cautionary note, Bandag Chairman and CEO Martin G. Carver said the company experienced a significant slowing in retread sales in North America, due in part to weakened demand for new trucks—which makes more tires available to the aftermarket—and rising imports of low-priced new truck tires.
"Given the softer demand, we anticipate that it will be more difficult to recover future increases in raw materials costs through further price increases," Mr. Carver said.
For the quarter ended June 30, Bandag reported a 9.4-percent gain in net earnings to $17.6 million, while sales fell 1 percent to $249.1 million.
For the six months, Bandag´s net profits increased 5.7 percent to $27.7 million as sales were off by 1 percent to $473.4 million.
Bandag´s second-quarter sales decline resulted from a 7-percent drop in global tread volume, offset in part by a 7.6-percent rise in sales by Tire Distribution Systems, the company´s commercial tire distribution subsidiary.
TDS more than doubled its pre-tax earnings in the second quarter, to $1.88 million, but the unit was still $1.01 million in the red for the half-year.
Through June, TDS´s sales had grown 6.9 percent to $194.8 million.