Bandag Inc. reported a 27.4-percent drop in 2001 consolidated net earnings to $43.8 million as weak offshore business offset gains in North America.
Sales for the year dipped 3.1 percent to $964.9 million. For the fourth quarter ended Dec. 31, Bandag's consolidated net earnings surged 17.6 percent over the same period in 2000 to $17.4 million while consolidated net sales for the quarter declined 1.4 percent to $249.2 million vs. $252.7 million for the same quarter the previous year.
The company said its fourth-quarter results included non-recurring pretax charges of $3.4 million, primarily for closure of a manufacturing plant in Chino, Calif., realignment of its North American sales force and a provision for certain post-retirement health care costs for terminated employees.
Chairman and CEO Martin Carver noted that Muscatine-based Bandag's offshore operations have experienced difficult economic conditions and strong competitive pressures.
``Strong fourth-quarter results in Bandag's North American traditional business-where net sales increased 5 percent over fourth quarter 2000-were offset by weak performance in its offshore operations,'' Mr. Carver said. ``Gross margin improved by 6 percentage points during the fourth quarter in Bandag's traditional North American business, but this was largely offset by operating expense increases due primarily to changes in provisions relating to litigation.''
Although encouraged by the level of business activity at Bandag dealerships in the fourth quarter, he said Bandag doesn't expect an economic recovery before the year's second half.
Tire Distribution Systems Inc., a Bandag subsidiary, reported an operating loss of $11.1 million in 2001, compared with a $2.47 million loss in 2000.
TDS' net sales for the year dipped to $398.9 million, from $399.1 million in 2000. During the fourth quarter, TDS posted an operating loss of $5.71 million, compared with a loss of $4.08 million from the same period last year. Fourth-quarter sales rose 3.7 percent to $96.8 million.
Mr. Carver said operating and other expenses rose 12 percent, offsetting gains in sales and gross margin.