HUNTERSVILLE, N.C. (Aug. 20, 2008) — American Tire Distributors Holdings Inc. (ATD) attributed a doubling of its net income for the second quarter, ended July 5, to favorable tire pricing and inventory investment in the midst of a downturn in the general market.
ATD reported a 106-percent surge in net income to $2.34 million on a 7.4-percent increase in sales of $504.3 million, compared with the year-ago second quarter. For the first half, ATD recorded a $4.03 million net income, after a net loss of $481,000 in the year-ago period, as sales jumped 13.5 percent to $1.02 billion.
The Huntersville-based tire and wheel distributor said that despite a soft market, it was able to bolster sales due to factors including:
* The acquisitions of several dealerships—Paris Tire, Martino Tire and Homann Tire—last year, which added $19.4 million to the quarter-over-quarter increase;
* The sale of inventory purchased prior to manufacturer price increases; and
* Favorable tire pricing.
However, the increase was partially offset by a decline in passenger, light truck and other specialty tire unit sales and a slump in commercial truck tire sales that collectively accounted for $13.6 million, according to the company.