MUSCATINE, Iowa (Oct. 18, 2006) — Bandag Inc.'s unit volume in North America fell 6 percent in the third quarter but sales in that segment were flat as the retreading materials supplier's net sales overall rose to $260.2 million.
Bandag reported sales in North America of $123.1 million vs. $123.5 million a year ago. But segment operating profit in North America fell 66.6 percent to $8.11 million from $24.3 million.
Overall, the firm's sales rose 6.1 percent as net earnings fell 50.9 percent in the quarter. Bandag said it incurred pre-tax expenses in the quarter relating to the closure of its plant in Shawinigan, Quebec, employment reductions in North America and an employee reduction program in its international business. Net sales benefited from foreign currency translation.
For the nine-month period, Bandag's sales rose 8.7 percent to $719.8 million while net earnings dropped 75.9 percent to $9.03 million. Earnings from continuing operations also fell in the period by 32.1 percent to $25.4 million.
In North America, Bandag posted sales of $341.1 million, up 4.9 percent from the year-ago nine-month period. The segment operating profit, however, fell 35.9 percent to $30.7 million.
Though North American volume in the company's traditional business was down due to the loss of distribution and ongoing competition from imported new tires, Bandag Chairman and CEO Martin Carver said both its Tire Distribution Systems (TDS) and Speedco quick-lube truck service centers “delivered strong revenues and continue to benefit from the relatively strong commercial trucking activity.
“While it's too soon to see any benefits from lower crude oil prices on either our raw material or operating costs, Bandag has better aligned its operating costs with market needs.”