"Our company has seen many changes to the tire industry over the past 80 years, and we have always succeeded by remaining focused on supporting our customers across all channels, and the consumers they serve," Mr. Schuette said.
ATD's difficulties began earlier this year when two of its largest customers, Bridgestone Americas Inc. and Goodyear, announced they were discontinuing most or all their supply relationship with the tire distributor. The two tire makers launched their own distribution joint venture, TireHub L.L.C., which began operations on July 3.
Soon after losing two major customers, Moody's Investor Service Inc. questioned whether ATD had sufficient cash reserves to cover certain projected interest payments and maintenance costs in the near future.
Moody's said ATD must cut a significant amount of its cost, while replacing 40 percent of the revenue lost from the departures of Goodyear and Bridgestone, in order to cover projected annual interest payments and maintenance investments of $243 million.
In late July, ATD restructured its operations internally, eliminating 100 positions at its Field Support Center (FSC) in Huntersville as part of a new strategic plan. In addition, ATD said it would reinvest in 40 new positions— in large part to bolster its Tire Pros franchisees — many of which have been filled.
Chicago-based Kirkland & Ellis L.L.P. is serving as legal counsel to ATD, while global consulting firm AlixPartners L.L.P. is an operational advisor. Investment banker Moelis & Co. L.L.C. is serving as financial advisor.
Mr. Schuette told his associates he is grateful for their hard work, "steadfast" support and dedication. "Your passion is inspiring and on behalf of the entire management team, thank you for all you do for ATD."