Despite the poor economic conditions in 2002, five tire industry companies posted improved annual earnings.
After racking up ``very solid'' numbers for fiscal 2002, Cooper Tire & Rubber Co. expects to improve its fiscal 2003 earnings over the $111.8 million net profit it reported for 2002, provided the economy picks up in the second half of the year.
For the year ended Dec. 31, Cooper reported increases in net earnings, operating profit, sales and cash flow, while at the same time reducing debt and trimming inventories.
``We set certain goals at the beginning of the year, and we achieved them...Each of these (achievements) is a solid accomplishment. Combined they are outstanding,'' said Thomas A. Dattilo, chairman, president and CEO.
In the Tire Group, Findlay, Ohio-based Cooper boosted operating profit 87.7 percent to $137.4 million while sales increased 3.8 percent to $1.77 billion. Unit shipments outpaced dollar sales volume; tire unit sales rose nearly 5 percent overall with units shipped to regional retailers up more than 30 percent and Cooper brand units improving nearly 6 percent in North America, the company said.
Cooper pointed out the 2001 Tire Group operating earnings figure was reduced by $72 million in class-action lawsuit settlement charges, leaving the 2002 figure slightly below that in 2001.
Cooper credited this change in operating profit to the positive impact of higher tire sales being offset by less favorable product and customer mix, operating at less than full capacity (to support inventory reduction efforts) and higher product liability costs.
For the year, Cooper reported $111.8 million in net earnings on sales of $3.33 billion vs. $18.2 million and $3.15 billion a year ago. However, the results for 2001 included the impact of expenses related to the settlement of class-action suits that had been filed against Cooper in 2000; without these expenses, 2001 net income would have been $63 million, Cooper said.
For the quarter ended Dec. 31, Cooper reported a 49.7-percent increase in net income to $23.5 million as sales shot up 8.4 percent to $841.6 million. Tire operations sales rose 8.6 percent to $457.6 million, as unit volumes increased 10 percent. Operating profit fell 25 percent to $29.7 million, for the same reasons mentioned earlier.
For the current year, Mr. Dattilo expects economic conditions and tire demand to grow in the second half.
Cooper also declared a dividend of 10.5 cents per share, payable March 28 to shareholders of record on March 3. This is Cooper's 124th consecutive quarter of issuing a dividend.
Carlisle Tire & Wheel Co. posted higher sales and reduced operating costs last year, contributing to an 86-percent improvement in fiscal 2002 operating earnings for Carlisle Cos. Inc.'s Industrial Components segment.
Carlisle did not specify the tire and wheel unit's sales or earnings but indicated they played a measurable role in the improvements in the Industrial Components business' performance. The segment reported earnings of $54.2 million on sales of $622 million, which were 31 percent ahead of 2001.
For the full year, Charlotte, N.C.-based Carlisle had record sales of $1.97 billion, up 6.6 percent from 2001, and net income of $28.6 million, up 15.2 percent from 2001.
In 2002, the company aggressively pursued cost reductions, manufacturing efficiencies, inventory reductions and new product introductions in its markets, said Richmond McKinnish, Carlisle president and CEO.
Carlisle posted fourth-quarter net income of $14.9 million - nearly double the $7.6 million earnings posted in 2001 - on sales of $463.9 million. The fourth-quarter sales figure, a company record, was up 7 percent from the $433.5 million reported in 2001.
If the U.S. economy continues its modest expansion, the firm's earnings could be in the $2.60-$2.80 per-share range in 2003, Mr. McKinnish said.
A slight downturn in sales revenue in the fourth quarter left Group Michelin's fiscal 2002 sales 2.7 percent ahead of 2001 at $14.7 billion, the firm reported.
The sales decline was influenced heavily by exchange rates; the company's volumes were up 3.5 percent in the quarter and 2.4 percent for the year. Earnings will be released Feb. 25; in the first half, Michelin's operating income was up 16 percent over 2001, at $511 million, on sales of $7 billion.
In North America, the firm's passenger and light truck tire replacement market sales fell 2 percent from 2001, but this still translated into a small market share gain since the overall market was down further, Michelin said. Original equipment sales were up as well, as the company improved its mix.
Truck tire sales were up 3.9 percent, but this gain only brought Michelin part way back to its aftermarket presence of early 2001 before it raised prices and lost customers.
TBC Corp. reported record sales and earnings for the fourth quarter and year.
Net sales rose 12.2 percent to $277.8 million for the fourth quarter and climbed 10 percent to $1.1 billion for the year, TBC said. Net income in the quarter surged 42.1 percent to $8.1 million. For the year, net income was up 30 percent to $27.4 million.
Same-store sales for TBC's retail arms-Big O Tires Inc. and Tire Kingdom Inc.-increased 3.8 percent in the fourth quarter and 4.8 percent for the year, the company said.
Unit tire sales for the retail subsidiaries grew 5.9 percent in the fourth quarter, compared with the average 3-percent increase in the industry, Memphis-based TBC said. Unit tire sales for the year grew 5.4 percent though most of the industry saw a slight decline, the company said. Exclusive of acquisitions, the company exceeded its new store growth objective by 33 percent, ending the year with 222 Tire Kingdom locations and 536 franchised Big O outlets, he added.
For 2003, the company expects growth of about 8 percent plus as many as 60 new retail stores excluding possible acquisitions. TBC expects net sales of about $270 million for the first quarter of 2003 with full-year earnings of $1.38 to $1.40 per share.
Akron-based equipment manufacturer Myers Industries Inc. reported higher sales and earnings in the fourth quarter and for 2002.
The parent company of Myers Tire Supply and Patch Rubber Co. saw earnings soar 57.7 percent for the year to nearly $24 million on flat sales of $608 million.
The adoption of new accounting standards, which discontinued the amortization of goodwill, favorably influenced income before taxes and earnings for both the quarter and year, the company said.
In the fourth quarter, earnings rose 73.4 percent to $4 million as sales improved 7.4 percent to $159.3 million.
Myers also reduced its debt by $15 million in the fourth quarter and $32 million for the year.
At the end of 2002, total debt was down 12 percent to $232.9 million from $264.9 million in 2001.