Bandag Records $12 Million Net Earnings

Bandag has announced that its second quarter earnings rose 37 per cent, largely due to the profits of its recently acquired lubrication service. The company announced earnings of $11.9 million (£6.4 million), compared with $8.7 million this time last year. Sales were also up, rising to $211 million, a $7 million increase on last year’s figures.

In February Bandag bought an 87.5 per cent share of Speedco, a heavy truck ‘quick-lube’ service. In its first full quarter as part of the company, Speedco made $1.8 million from $14.4 million of sales. Losses at Tire Distributions Systems were reduced from $2.4 million a year ago, to $34,000. The figures were also improved by the company’s $2 million reduction in corporate losses and other expenses. According to the company, favourable tax adjustments accounted for another $1 million.

Chairman and CEO, Martin Carver, described several factors that have contributed to Bandag’s second-quarter performance. “Globally, tread volume was up by 5 per cent during the quarter, reflecting increased trucking activity, particularly in North America,” he said. “In its first full quarter as part of Bandag, Speedco Inc. demonstrated both its fit to Bandag and the validity of our strategy to offer our customers a wider range of vehicle services.” Speedco had an operating income of $1.8 million and its net sales amounted to $14.4 million for the second quarter.

“Also important, was Tire Distribution Systems Inc.’s performance improved significantly during the quarter,” said Mr Carver. Bandag’s distribution subsidiary (TDS) reduced its net loss from $2.4 million a year ago to a loss of $34,000, “reflecting the benefits of selected divestitures and sales increases in some of the remaining locations.”