Bandag Second Quarter Results

Bandag, Incorporated has reported consolidated net income of $8.7 million, or $0.45 per diluted share for second quarter 2003, compared to second quarter 2002 consolidated net income of $11.

7 million, or $0.57 per diluted share, a decrease of 26% and 21% for consolidated net income and diluted earnings per share, respectively.Second quarter 2003 results were reduced by approximately $2.

2 million due to net foreign exchange losses. Second quarter 2003 results were also reduced by approximately $1.5 million in net charges related to Bandag’s distribution subsidiary, Tire Distribution Systems, Inc.

(TDS), for store divestitures and a real estate impairment charge. Consolidated net sales for second quarter 2003 were $204.1 million, a decline of approximately 12%, compared to consolidated net sales of $231.

1 million in the prior year period.In announcing second quarter results, Martin G. Carver, Chairman of the Board and Chief Executive Officer of Bandag said, “Worldwide, the anticipated, but absent, second quarter turnaround and weaker US Dollar were key factors in the decline in Bandag’s second quarter earnings performance.

In North America, the truck tire replacement market remained soft due to generally flat trucking freight volumes. In Europe, after a relatively strong start in the first quarter, performance gave way to slower sales during the second quarter.”Addressing the performance of TDS, Mr.

Carver said, “TDS same-store sales were down somewhat, but relatively consistent with overall Bandag dealer purchase patterns. Following our strategy, TDS continued to selectively divest locations during the quarter, which further tightens its market focus while strengthening the capability of the Bandag Strategic Alliance to serve its fleet customers.”Mr.

Carver went on to say, “Despite the difficult economic conditions, our dealers continue to invest in their businesses. Sales of new equipment and technology have clearly signalled our dealers’ continued confidence in their future. In the face of a challenging business climate, Bandag and its Alliance are building a stronger, more capable distribution channel.