MUSCATINE, Iowa (April 19, 2006) — Bandag Inc., led by its Tire Distribution Systems (TDS) Inc. and Speedco units, reported an 11.9-percent jump in sales in the first quarter, but earnings from continuing operations fell 36.7 percent on tighter margins.
The net result was a loss of $12.6 million, based on the deferred loss on the sale of its South African business.
For the quarter ended March 31, Bandag reported net income of $3.78 million on sales of $212.4 million. Pre-tax operating earnings fell 39.1 percent to $6.11 million as costs grew faster than sales.
Most of the firm's sales improvement came from higher selling prices, as the volume of tread rubber and associated materials increased only 1 percent in North American and fell 17 percent internationally. Volume in Europe, by contrast, was up 9 percent.
TDS and Speedco reported 30- and 34.3-percent jumps in sales, to $42.5 million and $23.6 million, respectively. TDS reported higher volume and higher selling prices while Speedco reported higher same-store sales and revenue from new stores opened since a year ago.
Looking ahead, Bandag Chairman and CEO Martin Carver said, “Globally, the intensifying competitive environment demands that we manage our business ever more closely…. We are confident that…TDS' solid operating performance, continued Speedco expansion and the underlying strength in trucking markets around the world provide a platform for continued Bandag progress in 2006.”