Nokian, Carlisle report record year Carlisle Monro
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AKRON—Nokian Tyres P.L.C. and Carlisle Companies Inc. reported record annual sales and earnings for 2012.
Meanwhile, Monro Muffler Brake Inc. suffered double-digit drops in operating and net income for the third quarter and nine months, ended Dec. 29, despite higher sales in both periods.
Nokian called 2012 a “challenging” economic environment but expects to report improved results this year despite a slow start to the 2013 fiscal year. Carlisle also expects slight improvements in 2013 sales and earnings as the company pursues plant renovations and other improvements.
Nokian reported 2012 operating and net income of $533.4 million and $425.3 million—gains of 9.2 and 7.1 percent, respectively. Sales jumped 10.7 percent to $2.07 billion.
For fiscal 2013, Nokian anticipates steady growth in Russia and the Nordic countries and said pressure on margins will ease because of falling raw materials prices.
Fiscal 2012 was a mixed bag for the company, with passenger tire and Vianor retail store sales up 13.9 and 5.7 percent, respectively. Heavy and truck tire, and retreading, sales were down 7.4 and 10.9 percent, respectively.
The passenger tire segment's sales grew to $1.57 billion, or nearly three-fourths of corporate sales, Nokian said. Unit operating profit grew 12.5 percent to $528 million, or 33.7 percent of sales. In North America, tire sales jumped 10.7 percent, representing 6.9 percent of the division's revenues.
Nokian's Vianor equity-owned tire distribution business reported sales of $405.3 million as the unit added 127 corporate and partnership stores—including its first in France, Serbia and Bosnia—for a total of 1,037 locations in 26 countries. The bulk of the stores, 553, are in Russia.
Of these, Nokian owns 182 outright—in the U.S., Finland, Norway, Russia, Sweden and Switzerland. Nokian said it expects to add more than 100 additional stores this year.
The unit fell to break-even last year on lower winter tire sales and consolidations costs.
Heavy tires unit sales fell to $134.2 million on weaker European demand for mining and forestry tires, while the truck tire/retreading sector dropped to $68.5 million on lower European demand.
Carlisle said acquisitions made throughout last year provided significant contributions to its year-end results.
Carlisle Transportation Products, which includes Carlisle Tire & Wheel, reversed an operating loss in the fourth quarter and quadrupled pre-tax operating income for the year on solid sales gains.
The company did not break out the tire and wheel business unit numbers but said sales in the power equipment and agriculture/construction markets were “relatively level” with the prior year.
Earnings before income and taxes (EBIT) rose 54.2 percent for the year to $424.3 million on 12.6-percent higher sales of $3.63 billion, Carlisle reported. Net income from continuing operations jumped 46.9 percent to $267.3 million, or 7.4 percent of sales.
The transportation products segment reported EBIT of $52.4 million for the year on 6.2-percent better sales of $778.2 million. EBIT in the fourth quarter was $4.7 million, up from a $3.8 million loss in the 2011 quarter. Sales grew 5 percent to $161.7 million.
David Roberts, chairman, president and CEO, said Carlisle expects sales growth in 2013 in the mid- to high-single-digit percent range as well as continued margin improvements from plant restructuring activities, organic sales growth and savings from the Carlisle Operating System.
Monro blamed its earnings declines on a shift in sales to lower-margin tire and service categories and a loss of leverage due to weaker year-over-year comparable store sales.
“The challenging economic environment continues to weigh heavily on our customers and the weather did not provide the tailwind we had anticipated in the third quarter,” said Monro President and CEO John Van Heel, with the exception of the last two weeks of December when comparable store sales increased 10 percent after seasonal snowfalls in the firm's marketing territories.
At the same time, though, Mr. Van Heel noted that Monro's customers “continue to delay purchases and trade down from higher-cost automotive maintenance and repair purchases.”
Oil changes, he said, were flat year-over-year at comparable stores, demonstrating that customers “continue to perform basic maintenance on their vehicles and continue to perform that basic maintenance at our stores.”
For the quarter, operating income fell 16.8 percent to $18.8 million and net income slipped 16.9 percent to $11.3 million. Sales, meanwhile, grew 7.8 percent to $190.4 million, although the gain was attributable entirely to sales from recently acquired and newly opened stores.
Comparable store sales fell nearly $10 million on lower business in tires (down 2 percent), alignments (down 6 percent), front end/shocks (down 9 percent), brakes (down 12 percent) and exhaust (down 20 percent), Monro said. The sales contribution from new/acquired stores was $23 million.
For the nine-month period, operating income fell 21.3 percent to $58.2 million and net earnings dropped 21.9 percent to $34.4 million. Sales increased 4.1 percent to $536.1 million, but comparable store sales were off 5.9 percent.
During November and December, Monro completed four acquisitions totaling 79 stores generating approximately $138 million in annualized sales.
These transactions—Tire Barn Warehouse (31 locations in Indiana, Illinois and Tennessee), Towery's Tire and Auto Care (27 stores in Kentucky and Indiana), Enger Tire (12 stores in northern Ohio) and Tire King (nine stores in North Carolina)—enabled the company to fill in existing markets as well as expand its footprint into Kentucky and Tennessee.
Mr. Van Heel called Monro's long-term outlook “very positive” but cautioned that near-term “visibility remains cloudy and we expect trends will continue to be choppy in our geographic regions as the economic environment weighs on consumer purchasing behavior.”
Historically, he added, Monro's business model has allowed the firm to improve its market share regardless of the economic or operating environment, and the key long-term macro-economic trends—the number of vehicles in operation, the increasing average age of those vehicles and the decreasing number of service bays in operation—are unchanged and remain positive for the business.
Finally, Mr. Van Heel said Monro “continues to see increased acquisition opportunities in this challenging market.”
Meanwhile, Monro Muffler Brake Inc. suffered double-digit drops in operating and net income for the third quarter and nine months, ended Dec. 29, despite higher sales in both periods.
Nokian called 2012 a “challenging” economic environment but expects to report improved results this year despite a slow start to the 2013 fiscal year. Carlisle also expects slight improvements in 2013 sales and earnings as the company pursues plant renovations and other improvements.
Nokian reported 2012 operating and net income of $533.4 million and $425.3 million—gains of 9.2 and 7.1 percent, respectively. Sales jumped 10.7 percent to $2.07 billion.
For fiscal 2013, Nokian anticipates steady growth in Russia and the Nordic countries and said pressure on margins will ease because of falling raw materials prices.
Fiscal 2012 was a mixed bag for the company, with passenger tire and Vianor retail store sales up 13.9 and 5.7 percent, respectively. Heavy and truck tire, and retreading, sales were down 7.4 and 10.9 percent, respectively.
The passenger tire segment's sales grew to $1.57 billion, or nearly three-fourths of corporate sales, Nokian said. Unit operating profit grew 12.5 percent to $528 million, or 33.7 percent of sales. In North America, tire sales jumped 10.7 percent, representing 6.9 percent of the division's revenues.
Nokian's Vianor equity-owned tire distribution business reported sales of $405.3 million as the unit added 127 corporate and partnership stores—including its first in France, Serbia and Bosnia—for a total of 1,037 locations in 26 countries. The bulk of the stores, 553, are in Russia.
Of these, Nokian owns 182 outright—in the U.S., Finland, Norway, Russia, Sweden and Switzerland. Nokian said it expects to add more than 100 additional stores this year.
The unit fell to break-even last year on lower winter tire sales and consolidations costs.
Heavy tires unit sales fell to $134.2 million on weaker European demand for mining and forestry tires, while the truck tire/retreading sector dropped to $68.5 million on lower European demand.
Carlisle said acquisitions made throughout last year provided significant contributions to its year-end results.
Carlisle Transportation Products, which includes Carlisle Tire & Wheel, reversed an operating loss in the fourth quarter and quadrupled pre-tax operating income for the year on solid sales gains.
The company did not break out the tire and wheel business unit numbers but said sales in the power equipment and agriculture/construction markets were “relatively level” with the prior year.
Earnings before income and taxes (EBIT) rose 54.2 percent for the year to $424.3 million on 12.6-percent higher sales of $3.63 billion, Carlisle reported. Net income from continuing operations jumped 46.9 percent to $267.3 million, or 7.4 percent of sales.
The transportation products segment reported EBIT of $52.4 million for the year on 6.2-percent better sales of $778.2 million. EBIT in the fourth quarter was $4.7 million, up from a $3.8 million loss in the 2011 quarter. Sales grew 5 percent to $161.7 million.
David Roberts, chairman, president and CEO, said Carlisle expects sales growth in 2013 in the mid- to high-single-digit percent range as well as continued margin improvements from plant restructuring activities, organic sales growth and savings from the Carlisle Operating System.
Monro blamed its earnings declines on a shift in sales to lower-margin tire and service categories and a loss of leverage due to weaker year-over-year comparable store sales.
“The challenging economic environment continues to weigh heavily on our customers and the weather did not provide the tailwind we had anticipated in the third quarter,” said Monro President and CEO John Van Heel, with the exception of the last two weeks of December when comparable store sales increased 10 percent after seasonal snowfalls in the firm's marketing territories.
At the same time, though, Mr. Van Heel noted that Monro's customers “continue to delay purchases and trade down from higher-cost automotive maintenance and repair purchases.”
Oil changes, he said, were flat year-over-year at comparable stores, demonstrating that customers “continue to perform basic maintenance on their vehicles and continue to perform that basic maintenance at our stores.”
For the quarter, operating income fell 16.8 percent to $18.8 million and net income slipped 16.9 percent to $11.3 million. Sales, meanwhile, grew 7.8 percent to $190.4 million, although the gain was attributable entirely to sales from recently acquired and newly opened stores.
Comparable store sales fell nearly $10 million on lower business in tires (down 2 percent), alignments (down 6 percent), front end/shocks (down 9 percent), brakes (down 12 percent) and exhaust (down 20 percent), Monro said. The sales contribution from new/acquired stores was $23 million.
For the nine-month period, operating income fell 21.3 percent to $58.2 million and net earnings dropped 21.9 percent to $34.4 million. Sales increased 4.1 percent to $536.1 million, but comparable store sales were off 5.9 percent.
During November and December, Monro completed four acquisitions totaling 79 stores generating approximately $138 million in annualized sales.
These transactions—Tire Barn Warehouse (31 locations in Indiana, Illinois and Tennessee), Towery's Tire and Auto Care (27 stores in Kentucky and Indiana), Enger Tire (12 stores in northern Ohio) and Tire King (nine stores in North Carolina)—enabled the company to fill in existing markets as well as expand its footprint into Kentucky and Tennessee.
Mr. Van Heel called Monro's long-term outlook “very positive” but cautioned that near-term “visibility remains cloudy and we expect trends will continue to be choppy in our geographic regions as the economic environment weighs on consumer purchasing behavior.”
Historically, he added, Monro's business model has allowed the firm to improve its market share regardless of the economic or operating environment, and the key long-term macro-economic trends—the number of vehicles in operation, the increasing average age of those vehicles and the decreasing number of service bays in operation—are unchanged and remain positive for the business.
Finally, Mr. Van Heel said Monro “continues to see increased acquisition opportunities in this challenging market.”
TB Reader Poll
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Published February 22, 2019
What kind of investments do you plan to make this year?
| Adding more employees. |
21% (17 votes)
|
| Upgrading software/hardware. |
16% (13 votes)
|
| Upgrading our equipment and/or facilities. |
37% (30 votes)
|
| Training for employees. |
27% (22 votes)
|
| Total votes: 82 | |
