Retread tire maker Bandag Inc., saw its net earnings climb in the fourth quarter of 2001, despite taking several charges to cover the cost of restructuring efforts.
Bandag said its consolidated net earnings in the fourth quarter of 2001reached $17.4 million, up from $14.8 million in the fourth quarter of 2000. The company's consolidated net sales in the fourth quarter of 2001 declined 1.4% to $249.2 million, down from $252.7 million in the same quarter of 2000.
Muscatine, IA-based Bandag added that its fourth quarter 2001 results included charges of $3.4 million, primarily to close its manufacturing facility in Chino, CA, realign its North American sales force and provide post-retirement health care costs for terminated employees.
For the full year, Bandag said its consolidated 2001 net earnings reached $43.8 million on net sales of $964.9 million. That's down from net earnings of $60.3 million and sales of $996.1 million in 2000.
There are, however, growing signs of a rebound in the transportation industry, said Martin G. Carver, Bandag's chairman and CEO.
"While there still exists a high degree of uncertainty in the economic outlook for 2002, by December, it appeared from several indicators that the recent oversupply of new replacement tires was beginning to work its way through the distribution channel," he said.
"New tire producers, which had cut production capacity throughout 2001, announced new tire price increases, indicating reduced supply," Carver added. "In addition, we began to see some of the lowest casing prices in several years, which indicated a coming influx of tire casings readily available for retreading, along with initial signs of improvement in the retread versus new tire sales mix at the dealer level during the fourth quarter. However, we don't expect the economy will begin to recover before the second half of the year."