MUSCATINE, Iowa (July 21, 2005)—Bandag Inc. reported higher sales and earnings in the second quarter, in part on increased North American business unit volume.
The Muscatine-based retreading materials and equipment supplier said net income rose 6.7 percent to $12.7 million in the period, as sales improved by a similar percentage to $227.3 million.
For the first half of the year, Bandag's net sales rose 7 percent to $417.0 million, up from $389.9 million in 2004. Net income improved 17.6 percent to $18.7 million from $15.9 million.
“Reflecting the benefits of increased transportation activity, North American net sales and unit volume were up over the 2004 period,” said Martin Carver, Bandag's chairman and CEO. “These favorable transportation business conditions also were evident in the quarter's strong performance at Speedco and Tire Distribution Systems Inc.”
Bandag said Speedco's sales grew by $6.2 million in the quarter to $20.6 million, bouyed by the June 2004 acquisition of six licensed locations that were owned and operated by PM Express Inc. The truck service chain also saw an increase in volume from existing locations and was aided by the addition of three new facilities and the expansion of tire lanes at nine other existing outlets.
Speedco's operating profit, however, fell 52.2 percent to $838,000 as gross margins declined due to the startup of new stores and the addition of the tires lanes, the company said.
TDS's second-quarter sales of $42.9 million declined by $8 million reflecting divestitures during 2004, but revenues were positively impacted by an increase in service revenue and new tire sales, the company said. The unit posted an operating profit of $2.7 million vs. a $34,000 in the comparable 2004 quarter.
Overall, Bandag said its North American business unit volume grew 5 percent and net sales increased 8 percent, in part on price increases.
Mr. Carver said continued growth in the trucking sector bodes well for Bandag's second half of 2005, but he remains concerned about higher oil and raw material prices.