TBCC Tbc Corp (MM)

TBC Reports Record First Quarter Sales and Earnings PALM BEACH GARDENS, Fla., April 25 /PRNewswire-FirstCall/ -- TBC Corporation (NASDAQ:TBCC), one of the nation's leading marketers of automotive replacement tires, today reported record sales and earnings for the first quarter ended March 31, 2005. Net sales in the first quarter increased 7.5% to $466.4 million, compared to $433.8 million in the prior-year period. Same store sales for TBC's retail segment increased 2.7% in the first quarter of 2005. TBC's total unit tire sales increased 3.1% in the first quarter of 2005, while unit shipments by tire manufacturers were up 1.7% based on preliminary reports. Net income increased 12.9% to $6.2 million, or $0.27 per diluted share, in the current quarter, versus $5.5 million, or $0.24 per diluted share, in the first quarter of 2004. Larry Day, TBC President and Chief Executive Officer, commented, "During the quarter, our retail operations benefited from growth in mechanical services and stronger private brand penetration. However, retail performance was impacted by increased spending, primarily for additional advertising, which did not produce the level of sales we had anticipated in this seasonally slower time. We have since adjusted this spending accordingly." "Our wholesale business performed well in the first quarter and exceeded our expectations. Stronger sales of specialty products sourced in China, as well as robust buying activity driven by anticipated price increases, contributed to wholesale's exceptional results," concluded Mr. Day. At March 31, 2005, the Company had a combined total of 1,172 stores in its retail network with 609 Company-operated locations and 563 franchised Big O stores. In fiscal 2005, the Company expects to add 20 to 30 stores to its Company-operated retail network and 15 to 20 new Big O franchise locations. For the full year of 2005, the Company reiterates earnings guidance to be in the range of $2.08 to $2.15 per diluted share. Earnings in the second quarter are forecast to be in the range of $0.49 to $0.53 per diluted share. TBC Corporation will host a conference call on Tuesday, April 26, 2005, at 10:00 a.m. Eastern time, to discuss first quarter 2005 results. A live Webcast of the conference call will be available by visiting the Company's Web site, http://www.tbccorp.com/. The Webcast will be archived at TBC's Web site until May 24, 2005. The Company also announces that it is delaying the mailing of its proxy materials for the 2005 Annual Meeting of Stockholders to enable the Company to include in its Annual Report to Stockholders the reports on internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002. The Company believes that its Section 404 reports will be finalized shortly and will not identify any material weakness. As a result, the Company is rescheduling its Annual Meeting of Stockholders previously scheduled for May 12, 2005 to early June 2005. About TBC: TBC Corporation is one of the nation's largest marketers of automotive replacement tires through a multi-channel strategy. The Company's retail operations include company-operated retail centers under the "Tire Kingdom", "Merchant's Tire & Auto Centers" and "National Tire & Battery" brands and franchised retail tire stores under the "Big O Tires" brand. TBC markets on a wholesale basis to regional tire chains and distributors serving independent tire dealers throughout the United States and in Canada and Mexico. The Company's proprietary brands of tires have a longstanding reputation for quality, safety and value. TBC Corporation Safe Harbor Statement This document contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding expectations for future financial performance, which involve uncertainty and risk. It is possible that the Company's future financial performance may differ from expectations due to a variety of factors including, but not limited to: changes in economic and business conditions in the world; increased competitive activity; consolidation within and among competitors, suppliers and customers; unexpected changes in the replacement tire market; the Company's inability to attract as many new franchisees or open as many distribution outlets as stated in its goals; changes in the Company's ability to identify and acquire additional companies in the replacement tire industry and successfully integrate acquisitions and achieve anticipated synergies or savings; fluctuations in tire prices charged by manufacturers, including fluctuations due to changes in raw material and energy prices, changes in interest and foreign exchange rates; the cyclical nature of the automotive industry and the loss of a major customer or program. It is not possible to foresee or identify all such factors. Any forward-looking statements in this release are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The Company makes no commitment to update any forward-looking statement included herein, or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement. Additional information on factors that could potentially affect the Company or its financial results may be found in the Company's filings with the Securities and Exchange Commission. TBC CORPORATION RESTATED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended March 31, RESTATED 2005 2004 NET SALES $466,372 $433,841 COST OF SALES 292,268 271,975 GROSS PROFIT 174,104 161,866 EXPENSES: Distribution expenses 18,890 17,966 Selling, administrative and retail store expenses 141,983 131,949 Interest expense - net 4,951 4,102 Other (income) expense - net (1,433) (718) Total expenses 164,391 153,299 INCOME BEFORE INCOME TAXES 9,713 8,567 Provision for income taxes 3,506 3,068 NET INCOME $6,207 $5,499 EARNINGS PER SHARE - Basic $0.28 $0.25 Diluted $0.27 $0.24 Weighted Average Common Shares Outstanding - Basic 22,419 22,021 Diluted 23,386 23,256 TBC CORPORATION RESTATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) ASSETS March 31, December 31, 2005 2004 (Unaudited) (Audited) CURRENT ASSETS: Cash and cash equivalents $1,433 $2,832 Accounts and notes receivable, less allowance for doubtful accounts of $8,823 at March 31, 2005 and $9,307 at December 31, 2004 Related parties 37,260 32,149 Other 127,818 117,812 Total accounts and notes receivable 165,078 149,961 Inventories 298,087 291,745 Refundable federal and state income taxes - - Deferred income taxes 24,929 24,790 Other current assets 17,014 19,270 Total current assets 506,541 488,598 PROPERTY, PLANT AND EQUIPMENT, AT COST: Land and improvements 8,003 10,400 Buildings and leasehold improvements 108,982 109,959 Furniture and equipment 107,483 105,232 224,468 225,591 Less accumulated depreciation 79,376 73,418 Total property, plant and equipment 145,092 152,173 TRADEMARKS, NET 15,824 15,824 GOODWILL, NET 180,442 180,353 OTHER ASSETS 40,523 39,331 TOTAL ASSETS $888,422 $876,279 TBC CORPORATION RESTATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY March 31, December 31, 2005 2004 (Unaudited) (Audited) CURRENT LIABILITIES: Outstanding checks, net $13,440 $30,368 Notes payable to banks 55,408 41,013 Current portion of long-term debt and capital lease obligations 41,243 41,216 Accounts payable, trade 162,452 128,656 Federal and State Income Taxes Payable 1,773 17,790 Warranty reserves 19,516 19,667 Other current liabilities 73,245 71,278 Total current liabilities 367,077 349,988 LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, LESS CURRENT PORTION 155,653 167,349 NONCURRENT LIABILITIES 43,016 43,320 DEFERRED INCOME TAXES 10,193 10,613 COMMITMENTS AND CONTINGENCIES - - STOCKHOLDERS' EQUITY: Common stock, $0.10 par value, shares issued and outstanding - 22,445 at March 31, 2005 and 22,312 at December 31, 2004 2,244 2,231 Additional paid-in capital 30,260 28,882 Deferred compensation (1,205) (789) Other comprehensive income (loss) (1,278) (1,570) Retained earnings 282,462 276,255 Total stockholders' equity 312,483 305,009 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $888,422 $876,279 TBC CORPORATION SUPPLEMENTARY DATA (In thousands, except percentages and store counts) (Unaudited) Three Months Ended March 31, 2005 2004 RECONCILIATION OF EBITDA TO NET INCOME: EBITDA $21,664 $19,415 Less - Depreciation and Amortization 7,000 6,746 Interest Expense - net 4,951 4,102 Provision for Income Taxes 3,506 3,068 NET INCOME $6,207 $5,499 SEGMENT INFORMATION: NET SALES - Retail $293,160 $283,141 Wholesale $173,212 $150,700 Consolidated $466,372 $433,841 EBITDA - Retail $13,069 $12,673 Wholesale $8,595 $6,742 Consolidated $21,664 $19,415 CAPITAL EXPENDITURES $3,941 $6,846 RETAIL SAME-STORE SALES % CHANGE 2.7% 6.2% RETAIL STORE COUNTS, at end of period Company Operated Stores 609 596 Franchised Big O Stores 563 571 Total 1,172 1,167 DATASOURCE: TBC Corporation CONTACT: Thomas W. Garvey, Executive V.P. & Chief Financial Officer of TBC Corporation, +1-561-227-0955; or Investors, Betsy Brod or Jonathan Schaffer, both of Brod & Schaffer, LLC, +1-212-750-5800 Web site: http://www.tbccorp.com/

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