Tire industry companies posted higher sales and earnings in the most recent quarter, including two that reported record-breaking sales.
Though its North American business unit volume was up 6 percent in the first quarter-with a net sales increase of $10 million-Bandag Inc. reported consolidated net sales for the quarter fell 1 percent to $173.5 million vs. the same 2003 period.
In the first quarter, Muscatine, Iowa-based Bandag also reported net income of $4.0 million, up from $2.4 million for the same period last year. The company reported net sales of $175.3 million in the first quarter of 2003.
Among various factors affecting sales, Bandag cited:
* A $22.7 million decline in net sales from divestitures and closures of Tire Distribution Systems Inc. outlets;
* Sales of $6.7 million from Speedco Inc., a quick-service truck lubrication business in which Bandag bought a majority stake in February;
* A 2-percent fall in European business unit volume;
* A 10-percent fall in international business unit volume; and
* A favorable impact from currency rates, which added approximately $7.1 million to consolidated net sales.
Bandag said trucking activity is trending stronger than in 2003. The company also said it has received positive feedback from dealers for its acquisition of Speedco.
Martin Carver, chairman and CEO of Bandag, said the company's strategic alliance dealers also were positive about ``the strategy that drove the acquisition-namely, building and expanding capabilities beyond our traditional tire products to enable Bandag and our strategic alliance dealers to address a broad range of trucking fleet needs.''
For the rest of the year, Bandag remains cautious. ``Like many companies, we continue to temper our optimism for the remainder of the year, particularly given the volatile conditions in the Middle East and elsewhere and consumer confidence in the U.S.,'' Mr. Carver said.
New products and new business pushed Cooper Tire & Rubber Co. to a 22.6-percent jump in sales and a 56-percent hike in net income for the first quarter, but increasing costs continued to bite at the company's heels.
Findlay-based Cooper reported record sales of $974.5 million and net income of $23.8 million for the period ended March 31.
Sales in the company's Tire Group also set a record at $485.1 million, up 22.5 percent from $395.9 million last year. The increase was driven by a 12-percent jump in tire unit volumes and improving customer and product mix, Cooper said.
``Our Tire Group set a first quarter record in sales but continued to face headwinds from raw materials costs, just as we had said and expected, and that impacted operating margins,'' said Tom Dattilo, chairman, president and CEO of Cooper.
Tire segment operating profit fell 3.6 percent to $15.7 million from $16.3 million last year. Increasing raw material costs reduced operating profit by $18 million. Product liability insurance and litigation costs were $9 million higher than 2003's first quarter. Cooper said these items essentially offset the positive impact of the higher sales.
Cost reductions in the group exceeded $10 million in the quarter and are on track to reach $49 million for the year, Cooper said.
In its Cooper-Standard Automotive business, operating profit surged 69.2 percent to $39.1 million from $23.1 million last year. Net sales in the segment grew 23 percent to a record $497.0 million from $404.2 million in 2003's first quarter.
Cooper said it still is exploring the possibility of selling the automotive segment, and it has met ``significant interest.'' Cooper said for the time being it remains focused on running the business.
Monro Muffler Brake Inc. expects to report fiscal 2004 earnings 20 percent ahead of its 2003 levels, the automotive service company said.
The company, which ended its fiscal year March 27, will report its full earnings May 20. Profits are expected to reach $1.17 to $1.19 per share, compared with 2003's earnings of 97 cents.
Comparable store sales for the fourth quarter are expected to increase about 2 percent vs. a 7.3-percent increase in the fourth quarter of 2003. Annual comparable store sales are expected to increase about 4.7 percent, the firm predicted.
During the fiscal year, Monro also closed its purchase of 36 Mr. Tire outlets in Maryland and Virginia for about $29 million.
``Throughout fiscal 2004, we continued to increase same-store traffic and improve comparable store sales,'' said Robert Gross, president and CEO for the Rochester, N.Y.-based company.
For fiscal 2005, Monro anticipates annual sales of $345 million to $355 million, with comparable store sales growth of 3-5 percent.
Monro said it plans to open 25 new stores in fiscal 2005-of which 20 are projected to be at BJ's Wholesale Club locations.
Net sales jumped 13.7 percent in the first quarter for Myers Industries Inc., mostly on favorable exchange rates and contributions from recent acquisitions.
The parent company of Myers Tire Supply and Patch Rubber Co. posted record sales of $185.5 million, up from $163.2 million last year. Akron-based Myers also reported net income of $8.86 million, a 23.1-percent jump from last year's $7.19 million.
Currency translation improved sales by $6.7 million, and the acquisitions of Michigan Rubber Products and WEK Industries increased sales by $4.4 million.
Myers said its distribution segment increased 18 percent in the quarter from higher sales to car dealers and from increased spending by tire dealers and other customers on equipment and supplies.