Bandag Profits Increase 10 per cent

Bandag Inc experienced a 10 per cent increase in profits during 2004, Tire Review has reported. According to the magazine, Bandag 2004 results also showed a 5 per cent increase in net sales compared to its 2003 figures. During 2004 Bandag recorded sales of $854.2 million, compared with $816.4 million in 2003, and net profits of $66.9 million, compared with $60.2 million in 2003.

“Bandag’s fourth quarter tread shipments were down approximately 10 per cent,” Martin Carver, Bandag chairman and CEO, told Tire Review. This was reportedly down to “a combination of factors including the loss of the Roadway business, dealers in Europe and Brazil buying ahead of price increases announced in the third quarter and the reduction in the number of dealers in some markets.”

“In addition, dealers in North America increased purchases in the fourth quarter of 2003 to take advantage of a year-end incentive programme that was significantly modified in 2004,” Mr Carver said. “Purchases of new trucking equipment increased significantly in 2004. According to some analysts, large fleets have elected to replace rather than expand their capacity, which may have adversely impacted the sale of retreads. Typically, an increase in new equipment purchases precedes increased demand for new and retread replacement tyres by several months.”

Mr Carver also noted that his company has made “significant strategic progress” in the fourth quarter. This is demonstrated by the company’s recent outsourcing agreement with US Xpress Leasing Inc., the opening of Speedco’s first new full-service and continued performance improvement at Tire Distribution Systems, Bandag’s distribution subsidiary, he added.