Full Year Results From Bandag
Bandag has announced consolidated net earnings of $17.4 million for the quarter ending 31st December 2001, bringing total net consolidated earnings for the year to $43.8 million, or $2.
12 per diluted share on sales of $964.9 million. This compares to 2000 net earnings of $60.
3 million on sales of $996.1 million. Net sales for the fourth quarter 2001 stood at $249.
2 million, compared to $252.7 million for the same quarter in the previous year. Martin Carver, Bandag’s CEO stated that strong results in the last quarter, net sales increased by 5 per cent over the same quarter in 2000, were offset by performance in offshore operations.
He noted that offshore operations continued to experience difficult economic conditions and strong competitive pressures. The Gross margin improved by six percentage points during the fourth quarter, but this was offset by operating expenses, in particular provision for litigation. Bandag’s tyre distribution subsidiary, Tire Distribution Systems Inc.
, improved sales performance by 4 per cent over the previous year, and increased its Gross margin by 0.5 per cent. However, operating costs increased by 12 per cent, more than negating the improvement.
The business has entered 2002 with firm targets to improve processes and cut internal costs. Carver indicated that there was still some economic uncertainty for 2002 but that there were indicators that the oversupply of new replacement tyres was working through the system and that reductions in new tyre production was being supported by increased prices. Additionally, he claimed that casing prices were the lowest they had been in several years.
He also stated that there was an improvement in the retread:new tyre ratio at the dealers during the fourth quarter. However, Bandag still views the economy with caution and does not expect to see recovery before the second half of the year. .
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