MUSCATINE, Iowa (Oct. 18, 2004) — Despite a 12-percent increase in net sales—helped in large part by a strong performance at recently acquired Speedco—Bandag Inc. reported a net earnings of 0.6 percent in the third quarter.
Bandag reported net earnings of $20.1 million, up slightly from $20.0 million last year. Consolidated net sales for the quarter were $236.8 million, up 12 percent from $211.4 million last year. Speedco, which Bandag bought in the first quarter, is responsible for $17 million of the sales increase, the Muscatine-based company said. Speedco is an on-highway, quick service truck lubrication subsidiary.
For the first nine months of the year, Bandag reported net earnings of $36 million, up from $31.1 million last year. Net sales rose 5 percent to $621.4 million vs. $590.7 million the previous year.
“Earnings improvement at Tire Distribution Systems Inc., Bandag's tire distribution subsidiary, and the International business unit, together with Speedco's strong performance, played a major role in offsetting lower earnings in the North American business unit,” said Martin Carver, Bandag's chairman and CEO.
The company said its North American business unit's volume fell 1 percent, a portion of which is from the loss of trucking company Roadway's business. Yellow Roadway Corp. decided this year not to renew Roadway's contract with Bandag. But the company also received $34 million in cash proceeds from the sale of tire and wheel assets that were repurchased by Yellow Roadway. Bandag also said the business unit's net sales fell 2 percent.
“Bandag has made significant progress in the first nine months, and we remain strategically focused on providing an expanding array of integrated services to keep trucks rolling,” Mr. Carver said. “While we remain optimistic about the strength of the global economy, we are keeping a watchful eye on rising energy prices and their impact on Bandag's business worldwide.”