PALM BEACH GARDENS, Fla. (Oct. 31, 2005) — TBC Corp. has reported a net sales increase for the third quarter on the heels of a 41.1-percent rise in net income to $15.3 million. For the nine months ended Sept. 30, net sales rose 7.6 percent to $1.47 billion compared with $1.37 billion last year.
The results, said TBC President and CEO Larry Day, were “in line with our previously disclosed guidance for the period,” and come as he noted the Palm Beach Gardens-based company is “on track” to complete its proposed sale to Sumitomo Corp. of America by the end of the year. The transaction is subject to stockholder approval and required regulatory clearance.
Net sales for the third quarter rose 9.5 percent to $521.6 million vs. $476.5 million in the same 2004 period. The company reported same-store sales for TBC's retail segment—which includes Tire Kingdom Inc., Merchant's Tire & Auto Centers, Big O Tires Inc. and National Tire & Battery (NTB)—increased 4.9 percent in the third quarter while total tire unit sales edged up 1.2 percent.
Although TBC's net income was an improvement over the $10.8 million it reported in the third quarter of 2004, the company added that earnings in last year's third quarter took a 12-cent per diluted share hit due to the negative impact of four major hurricanes.
Based on preliminary reports, TBC said total unit tire sales for the nine-month period increased 1.2 percent, falling short of the industry, which showed an overall increase of 3.0 percent. Net income in the period grew 32.3 percent to $33.4 million vs. $25.3 million last year. Meanwhile, retail same-store sales for the first nine months grew 3.9 percent.
TBC said it operates a total of 1,174 stores in its retail network, with 616 company-owned locations and 558 franchised Big O outlets.
After making an initial assessment of the financial effects on its business as a result of the recent spate of hurricanes that struck a number of areas where TBC has operations, the firm said about 33 stores are still not operational, mostly due to power outages. The company continues to monitor the situation on a daily basis, and said it does not believe the impact on the fourth quarter financial results will be material.