Retread tire manufacturer Bandag reported flat profits for the third quarter this year, despite 12% higher sales revenue when compared to the same quarter in 2003.
Muscatine, IA-based Bandag said its net earnings topped $20.1 million on $236.8 million in revenue, compared to profits of $20 million on revenues of $211.4 million in the third quarter last year. The company noted, however, that $17 million of the third quarter 2004 sales increase is solely attributable to Speedco, Bandag’s on-highway quick-service truck lubrication subsidiary, which it acquired in the first quarter this year.
For the first nine months of 2004, Bandag’s earnings reached $36 million on revenues of $621.4 million, compared to earnings of $31.1 million on revenues of $590.7 million over the same period in 2003.
“Earnings improvement at Tire Distribution Systems (TDS), our international business unit, and Speedco’s strong performance played a major role in offsetting lower earnings in the North American business unit,” said Martin Carver, Bandag’s chairman & CEO. However, as TDS plans to sell off 15 locations in Texas in the fourth quarter, he doesn’t expect profitability to remain at the current levels.
Carver added, though, that Bandag plans to continue expanding its Speedco network. Quick-service tire lanes were added in the third quarter at three existing locations— two in Texas and one in Georgia – and new facilities and additional expansions at existing facilities are scheduled in the fourth quarter of 2004 and throughout 2005.