CLERMONT-FERRAND, France — TBC Corp. generated 38.2% higher pre-tax operating income last year despite a 9.7% drop in sales revenue, according to Group Michelin, which co-owns TBC with Sumitomo Corp. of Americas (SCoA).
TBC's pre-tax operating income (EBITDA) rose to $209 million on sales of $4.19 billion, yielding an operating ratio of 5%, up from 3.3% in fiscal 2023, Michelin's figures show.
Michelin attributed the sales drop to the June 2024 sale of TBC's NTB and Tire Kingdom retail business units to Mavis Tire Express Service Corp.
At the same time, the divestiture yielded a $328 million gain for Michelin's bottom line, the Clermont-Ferrand-based tire maker said in its fiscal 2024 annual report. SCoA, on the other hand, reported $125 million in lost profits related to the NTB/Tire Kingdom divestiture.
West Palm Beach, Fla.-based TBC likely will experience a similar drop in sales revenue in fiscal 2025, to account for the five months of sales attributed to NTB and Tire Kingdom included in the fiscal 2024 accounts, as well as lost royalty revenue in the wake of TBC's pending sale of the Midas International franchise business, also to Mavis Tire Express.
TBC's primary business going forward will be its wholesale activities — conducted through its National Tire Wholesale (NTW) business unit — as well as royalties from its Big O Tires franchise business.
Sumitomo Corp. of America acquired TBC i— 2005 for $1.1 billion and sold a 50% interest to Michelin in 2018 as part of the companies' agreement to combine their separate wholesale Carroll Tire and TCi Tire Centers wholesale businesses to form NTW.