Bandag Dividend Despite Drop In Sales
Despite reduced sales and net income in the second quarter, due to difficult economic conditions and currency fluctuations, Bandag has maintained its quarterly dividend of 32 cents per share.
Bandag
Despite reduced sales and net income in the second quarter, due to difficult economic conditions and currency fluctuations, Bandag has maintained its quarterly dividend of 32 cents per share.
Norwegian Bandag dealer Dekkmann has signed a contract to supply tyres to Leonard Nilsen & Sonner, the company that supplies transport to three coal mines, situated in Svalbard. Svalbard consists of 150 islands near the North Pole and driving conditions are extremely harsh. Nine trucks make the 26 km journey from mine to harbour 32 times every day, seven days a week. Last year, Dekkmann supplied Nilsen with 1,000 Bandag retreads.
S.C. Rubber Group has been established as the first Bandag dealer in Romania. Currently, only three per cent of tyres sold in Romania are retreads, so the company says that the potential is enormous. S.C. Rubber plans to create a network of 10 service outlets across the country, with the first two operating by the end of this year.
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.
“The European Truck Tyre retreading industry is healthy and provides the transport industry with high quality products which allows them to reduce tyre cost and transport cost. However, retread products are not legislatively treated equally to new tyres, and this is a growing threat to sustained growth for this industry”. The legislative problems faced by the retreading industry were outlined to T & A by Lennart Lindström – product manager at Bandag Europe – during Autopromotec 2003.The basis for the EU legislative framework is the Whole Vehicle Type Approval (WVTA) directive 70/156/EEC. This directive sets out the rules for the use and production of many vehicle parts, including tyres. Up until now, the WVTA has not taken into account the existence of retreaded tyres, nor have any of the quite numerous regulations and directives that exist for new tyres. All legislative work on tyres in the EU is solely focusing on new tyres. The WVTA does not yet exist for trucks, but work is underway to introduce this certification for trucks, and then new truck tyres must meet the same requirements.The certification principle for type approval implies that each authority grants authorisation for a vehicle, a system, a component (like tyres) and this authority remains solely responsible for the conformity of production of the certified product.For retreads ECE Regulations 108 (passenger tyres) and 109 (truck tyres) exists.Despite industry efforts to introduce ECE 108 and 109 into an EU mandatory directive, Brussels has not taken any visible initiative.In absence of the expected and desired EU directive, some member states have started to introduce ECE regulations 108 and 109 into national mandatory legislation. This is the case in France, Spain, Poland, Croatia and the Czech Republic. Other countries like the UK, Sweden and Denmark have begun the national legislative process to introduce them. This still leaves a great number of countries with no active plans to introduce these regulations. It is estimated that over 200 retread companies out of approximately 700 active companies in Western Europe have gained their ECE 109 certificate to date. Absence of equal rules creates an unfair competitive market.Bandag are suggesting that it is necessary to form a retread industry interest group, in order to proactively define potential future legislative content on matters like noise, wet traction and rolling resistance, and work in close co-operation with legislative bodies. BIPAVER and BLIC should, perhaps, take the joint initiative to the creation of such a group.The need to recruit new members to BIPAVER, including supplier members was emphasised by RMA secretariat, Sheila Ikin. This is especially relevant now that BIPAVER is focused on the interests of the retreading industry. One of the causes taken up is the unjustified ban on the importation of retreaded tyres, currently operative in 11 countries known to the RMA. There is a definite need to protect the retread industry against damaging legislation, hence the moves by BIPAVER to persuade Brussels to transpose ECE 108 and 109 from a recommendation to a directive.
Bandag has declared a regular quarterly dividend of 32 cents per share on the Common Stock, Class A Common Stock and Class B Common Stock of the Company payable July 18, 2003 to shareholders of record at the close of business on June 18, 2003.
Bandag Incorporated has stated that its wholly-owned subsidiary, Tire Distribution Systems, Inc. plans to sell 19 stores and nine retread plants to a current independent Bandag franchised dealer and a previous independent Bandag franchised dealer. TDS previously sold nine of its Tennessee commercial and retail outlets in 2003.The shift of TDS locations into the hands of independent Bandag dealers began last year with the sale of several commercial and retail locations in Alabama, Georgia and Tennessee. One of the two transactions involves the proposed sale of seven stores and three retread plants in the state of Louisiana and seven stores and three retread plants in the state of Mississippi to Southern Tire Mart. The second deal sees five stores and three retread plants located in the state of Arkansas going to Trans American Holdings LLC, headquartered in Fort Smith, Arkansas.
The Board of Directors of Bandag, Incorporated, (NYSE: BDG and BDGA) declared a regular quarterly dividend of $.32 per share on the Common Stock, Class A Common Stock and Class B Common Stock of the Company payable April 17, 2003 to shareholders of record at the close of business on March 21, 2003.
Ashford-based PK Commercial Tyres is a well-established Bandag franchisee, supplying quality truck retreads for a number of years. Managing director Paul Kuske has experienced both good times and bad, changes in the market and changes in user attitudes and the company has weathered it all, adapting to these changes.Recent changes in the retread market prompted Paul to re-think where the future lay for his company. The main problem is the increasing demand by customers for management information and a total tyre management service, rather than just product. “We found that we were having to sell the tyre over again – once to the end user and then to the tyre distributor or service provider” said Paul. There were other dangers too – if you use outside companies to provide the services that you are unable to offer, there is always the chance that they might compete for your contracts. “We lost two fleet contracts to a former service provider partner” he remembers.It was time for a re-appraisal of the company’s objectives. PK Commercial took over a retail tyre depot in Aylesford, near Maidstone, offering fast-fit services and MOTs for car drivers. The location and the diversification into car tyre retailing proved successful.
Bandag Incorporated declared an increase in the regular quarterly dividend from $.315 per share to $.32 per share on the Common Stock, Class A Common Stock and Class B Common Stock of the Company payable January 17, 2003 to shareholders of record at the close of business on December 19, 2002.
National Tyre Services Limited (Zimbabwe) has invested $20 million on the commissioning of a third curing chamber at its Harare Bandag factory. The investment comes at a time when other companies are closing shops or relocating to other countries. NTS Zimbabwe is an official re-distributor of Dunlop tyres and is now the largest customer in southern Africa for Bandag products.
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