CHARLOTTE, N.C. (May 18, 2005) — American Tire Distributors Holdings Inc. (ATD) reported higher gross profits and sales in the quarter ended April 2 on the first-time consolidation of activities acquired in 2004, but the firm suffered a pre-tax loss of $20.9 million due to transaction expenses related to its acquisition by Investcorp.
ATD's first quarter revenue jumped 17.6 percent to $354.3 million, largely on the strength of the first-time consolidation of sales by Target Tire and Big State Tire, which were acquired in the third quarter of 2004, but offset partially by an additional week of revenues in the first quarter of 2004.
ATD reported a pre-tax loss of $20.9 million in the first quarter; the loss resulted from $28.2 million of transaction expenses relating to Investcorp's $700 million purchase of ATD, which closed March 31. Gross profit increased $6.3 million as a result of increased sales.
ATD reported pre-tax income in 2004 of $9.4 million.
Also contributing to the improved first quarter sales was an increase in sales of certain lower-margin private label brands due to better supply and new markets.
ATD Chairman and CEO Richard Johnson said the firm's revenue continues to be strong through April and into May, and the wheel business has begun to show signs of increased activity.