CHARLOTTE, N.C. (Aug. 8, 2013) — American Tire Distributors Holdings Inc. fell $5.84 million into the red for the quarter ended June 29 despite 9.2-percent higher sales.
The net loss can be attributed primarily to a lower benefit for income taxes in the period vs. what was reported a year ago.
Operating income fell 5.6 percent to $11.8 million on sales of $955.1 million.
ATD attributed the higher revenue entirely to new business from acquisitions — Consolidated Tire & Oil, TriCan Tire Distributors and Regional Tire Distributors Inc. — and distribution centers opened in the past year, which together added $113.4 million in incremental sales. This gain was offset, though, by the effects of lower net pricing, which ATD valued at $26.7 million.
For the six months ended June 29, ATD reported operating income of $6.05 million on 7.6-percent higher sales of $1.8 billion. The net loss ballooned to $22.1 million from $1.95 million.
The sales increase was driven by the incremental business generated by the new distribution centers and acquisitions, ATD said. This growth added $178.4 million in sales, but it was offset by lower net pricing of $34.5 million.
The pricing drop was driven primarily by manufacturer price repositioning, one less selling day in 2013 and an overall softer sales unit environment, ATD said.
ATD said its $1.7 income tax benefit for the quarter was based on a pre-tax loss of $7.6 million. By contrast, the tax benefit in the fiscal 2012 second quarter was $10.3 million.
The effective rate of the year-to-date tax benefit is lower than the statutory income tax rate, ATD said, primarily due to a tax benefit related to lower income taxes on international operations and the impact of several non-deductable tax items as well as our state effective tax rate, a result based on our legal entity tax structure and individual state tax filing requirements.
ATD operates 133 distribution centers in the U.S. and Canada, offering approximately 40,000 stock-keeping units to roughly 62,000 customers in the U.S. and 10,000 in Canada.