Tire Distribution Systems Inc. (TDS) completed its divestiture of locations to Southern Tire Mart L.L.C. in 2004, but it also added some outlets to its fold.
The Bandag Inc. subsidiary sold 18 locations to Columbia, Miss.-based Southern Tire Mart-15 in Texas and three in Tennessee, according to TDS President John McErlane. TDS and Southern Tire Mart had inked a deal in 2003 in which TDS agreed to sell 14 commercial stores and six retread plants in Louisiana and Mississippi and had included an option for Southern Tire Mart to buy the outlets in Texas as well.
The dealership exercised that option during the fourth quarter, but it also purchased a commercial store in Memphis, Tenn., and another store and retread plant in West Memphis earlier in the year.
One Texas store, in Amarillo, was sold to Billy Williams Tire Centers of Midland, Texas, for a total of 19 locations divested during 2004. The outlets sold were valued at $18.5 million but were sold for $13.4 million, according to Bandag's 10-K filing with the Securities and Exchange Commission.
TDS also actively pursued acquisitions in 2004, buying two commercial stores and a retread shop in Grand Junction, Colo., from Gay Johnson Tire Co. and three stores in Seattle from Nichols Tire.
The company also purchased from Transport Tire three outlets in Utah-a commercial store in Richfield and a store and retread plant in St. George. Mr. McErlane noted that TDS particularly wanted to strengthen its already significant presence in Utah through the acquisition.
Despite its sales activity last year, TDS has no plans to buy or sell stores in 2005, Mr. McErlane said.
``We don't have any grand plans of additional acquisitions,'' he said. ``We think our growth will be internal growth, but should an acquisition show up on the radar screen that makes sense for us to consider, we would.''
He said that if a Bandag dealer made a ``reasonable offer'' to purchase TDS outlets, he would definitely consider it, but he said he doesn't plan to divest any more outlets this year. He declined to discuss sales targets for 2005.
TDS's sales in 2004 dropped 16.6 percent to $201.6 million, a result of the divestitures, Mr. McErlane said. Commercial sales fell 18.1 percent to $140 million and retread sales suffered a 23.7-percent decline to $45 million.
The company posted operating earnings of $1.5 million compared with a 2003 loss of $3.02 million.