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ATD expands in Canada with RTD buy; posts loss

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CHARLOTTE, N.C.—American Tire Distributors Holdings Corp. (ATD) is expanding its still relatively new presence in Canada, acquiring Burlington, Ontario-based Regional Tire Distributors Inc., which serves about 3,100 customers through five distribution centers in Ontario and four in the Atlantic Provinces.

The acquisition coincided with the release of ATD's fiscal 2012 results, which showed a net loss of $14.4 million in fiscal 2012 despite 13.3-percent higher sales of $3.46 billion.

The acquisition of Regional Tire Distributors (RTD), carried out by ATD's Tri-Can Tire subsidiary for about $62.5 million, is expected to be finalized at the end of April.

Mike Kustra, president of RTD Ontario, will become president over the combined RTD-/TriCan operation. Chris Fletcher, president of TriCan, has been named non-executive chairman of the combined operation.

ATD, which has 108 distribution centers in the U.S. and 15 in Canada, said it plans to add several distribution centers across Canada.

ATD's fiscal 2012 net loss contrasts with fiscal 2011 net earnings of $117,000 and can be attributed to higher operating, interest and other miscellaneous expenses, according to ATD.

Sales rose on a combination of higher volumes and higher pricing. ATD attributed $167.1 million of the year-over-year increase to higher net pricing and $40.4 million to increased unit volume.

Offsetting some of the increases was a drop in the value of sales of Chinese tires—impacted by destocking of lower price-point inventories tied to the expiration of elevated U.S. tariffs last September—of $34.1 million, ATD said.

The combined results of new distribution centers opened since the beginning of 2011, as well as the acquisitions of TriCan, Consolidated Tire & Oil Inc. and North Central Tire Distributors, added $181.5 million of incremental sales during fiscal 2012, ATD said.

ATD recorded $5.2 million in acquisitions costs in 2012, primarily related to the acquisition of TriCan last November and CTO in May 2012.
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Previous | Published December 6, 2018

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