Exhibit 99
| NEWS RELEASE | | |
| CONTACT: | Warren W. Heidbreder |
| FOR IMMEDIATE RELEASE | PHONE: | 563-262-1260 |
| DATE: April 15, 2005 | URL: | www.bandag.com |
BANDAG, INCORPORATED REPORTS 1ST QUARTER EPS OF $0.30
Bandag, Inc. (NYSE: BDG and BDGA)
Flash Results
| (Numbers in Millions, Except Per Share Data) |
| Q1 2005 | | Q1 2004 | |
|---|
| Net sales | | | | $186.6 | | | $173.5 | |
| Net earnings | | | | $6.0 | | | $4.0 | |
| Diluted earnings per share | | | | $0.30 | | | $0.20 | |
| Shares outstanding - diluted | | | | 19.7 | | | 19.7 | |
MUSCATINE, IOWA, April 15, 2005 — Bandag, Incorporated (NYSE:BDG and BDGA) today reported consolidated net earnings of $6.0 million, or $0.30 per diluted share, for first quarter 2005. This compares to first quarter 2004 consolidated net earnings of $4.0 million, or $0.20 per diluted share. Consolidated net sales for first quarter 2005 were $186.6 million, an increase of eight percent, compared to consolidated net sales of $173.5 million in first quarter 2004. Net sales were positively impacted by approximately $4.2 million due to the effect of translating foreign currency denominated net sales into U.S. dollars.
In announcing first quarter 2005 results, Martin G. Carver, Chairman of the Board and Chief Executive Officer of Bandag said, “First quarter results reflected growing strength in the North American trucking industry. Globally, high raw material and transportation costs pressured margins in our traditional business. Bandag continued to invest in Speedco’s expanding operations, building new on-highway truck lubrication and tire service locations as well as adding tire service lanes at existing locations. Tire Distribution Systems, Inc. (TDS) operating results improved by $1.7 million, largely attributable to strengthening demand and margin improvement.”
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BANDAG, Incorporated
2905 N. Hwy. 61, Muscatine, IA 52761-5886
Tel 563.262.1400 – Url www.bandag.com
Financial Highlights
| | • | Factors that affected consolidated net sales for first quarter 2005 were: |
| | o | Speedco sales increased by $10.8 million compared to the prior year period. Sales in the first quarter of 2004 are included from February 13, 2004, the date Bandag acquired an 87.5% majority interest in Speedco. |
| | o | TDS sales declined $8.3 million from the prior year period, reflecting the divestitures during 2004. The divested locations had net sales of approximately $15.0 million in the first quarter of 2004. |
| | o | North America business unit volume increased five percent and net sales increased seven percent as compared to first quarter 2004. Net sales were positively impacted by a December 2004 price increase. |
| | o | European business unit volume decreased seventeen percent and net sales decreased nine percent. Unit volume and net sales were negatively impacted by the loss of several dealers during 2004; however, net sales were positively impacted by approximately $1.3 million due to the effect of translating foreign currency denominated net sales into U.S. dollars. |
| | o | International business unit volume increased six percent and net sales increased twenty-nine percent. Net sales were positively impacted by price increases and by approximately $2.2 million due to the effect of translating foreign currency denominated net sales into U.S. dollars. |
| | • | First quarter 2005 consolidated gross margin declined by one percentage point. TDS gross margin increased approximately four percentage points, primarily due to higher selling prices. Traditional business gross margin declined three percentage points primarily due to higher raw material costs. |
| | • | Consolidated operating and other expenses for first quarter 2005 were $0.5 million higher than the prior year period, primarily due to increased expenses related to Speedco expansion offset by the divestiture-related decrease at TDS. |
| | • | Interest income increased $0.8 million, primarily due to an increase in cash and interest rates. |
| | • | The effective tax rate increased to 41.8% from 36.5% in the prior year, largely attributable to an adjustment in the deferred tax balances. |
Outlook
Commenting on the outlook for 2005, Mr. Carver said, “On the positive side, we believe continued strength in the trucking industry in our major markets will work to Bandag’s benefit as we continue delivering an expanded array of valued-added vehicle services, which complement our traditional business. At the same time, we recognize that continued increases in raw material and transportation costs will be a concern throughout 2005.”
Bandag, Incorporated manufactures retreading materials and equipment for its worldwide network of approximately 1,000 franchised dealers that produce and market retread tires and provide tire management services. Bandag’s traditional business serves end-users through a wide variety of products offered by dealers, ranging from tire retreading and repairing to tire management systems outsourcing for commercial truck fleets. TDS sells and services new and retread tires. In addition, Bandag has an 87.5% interest in Speedco, Inc., a provider of on-highway truck lubrication and routine tire services to commercial truck owner-operators and fleets.
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Bandag, Incorporated
Unaudited Financial Highlights
(In thousands, except per share data)
| First Quarter
Ended March 31,
|
|---|
Consolidated Statements of Earnings
| 2005
| 2004
|
Income | | | | | | | | |
| Net sales | | | $ | 186,617 | | $ | 173,529 | |
| Other | | | | 2,424 | | | 1,762 | |
|
| |
| |
| | | | | 189,041 | | | 175,291 | |
Costs and expenses | | |
| Cost of products sold | | | | 123,294 | | | 112,803 | |
| Operating & other expenses | | | | 57,072 | | | 56,556 | |
|
| |
| |
| | | | | 180,366 | | | 169,359 | |
Income from operations | | | | 8,675 | | | 5,932 | |
| Interest income | | | | 1,813 | | | 1,050 | |
| Interest expense | | | | (456 | ) | | (562 | ) |
|
| |
| |
| Earnings before income taxes and minority interest | | | | 10,032 | | | 6,420 | |
| Income taxes | | | | 4,193 | | | 2,343 | |
| Minority interest | | | | (123 | ) | | 58 | |
|
| |
| |
| Net earnings | | | $ | 5,962 | | $ | 4,019 | |
|
| |
| |
Earnings per share | | |
| Basic | | | $ | 0.31 | | | 0.21 | |
| Diluted | | | $ | 0.30 | | | 0.20 | |
Weighted average shares outstanding | | |
| Basic | | | | 19,392 | | | 19,250 | |
| Diluted | | | | 19,707 | | | 19,655 | |
| First Quarter
Ended March 31,
|
|---|
Segment Information
| 2005
| 2004
|
| | | | | | | | | |
| Net Sales | | |
North America | | | $ | 88,131 | | $ | 82,217 | |
| Europe | | | | 19,389 | | | 21,196 | |
| International | | | | 28,869 | | | 22,443 | |
| TDS | | | | 32,677 | | | 40,939 | |
| Speedco | | | | 17,551 | | | 6,734 | |
|
| |
| |
| Total net sales | | | $ | 186,617 | | $ | 173,529 | |
|
| |
| |
Segment Operating Profit (Loss) | | |
North America | | | $ | 8,605 | | $ | 5,454 | |
| Europe | | | | 921 | | | 1,690 | |
| International | | | | 3,439 | | | 3,039 | |
| TDS | | | | (1,097 | ) | | (2,841 | ) |
| Speedco | | | | 799 | | | 903 | |
| Corporate expenses & other | | | | (3,992 | ) | | (2,313 | ) |
| Net interest income | | | | 1,357 | | | 488 | |
|
| |
| |
| Earnings before income taxes and minority interest | | | $ | 10,032 | | $ | 6,420 | |
|
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Bandag, Incorporated
Unaudited Financial Highlights
(In thousands)
Condensed Consolidated Balance Sheets
| Mar. 31,
2005
| Dec. 31,
2004
|
Assets: | | | | | | | | |
| Cash and cash equivalents | | | $ | 205,896 | | $ | 202,761 | |
| Accounts receivable - net | | | | 137,164 | | | 157,809 | |
| Inventories | | | | 77,962 | | | 69,892 | |
| Other current assets | | | | 55,078 | | | 55,793 | |
|
| |
| |
| Total current assets | | | | 476,100 | | | 486,255 | |
Property, plant, and equipment - net | | | | 172,760 | | | 170,018 | |
| Other assets | | | | 73,871 | | | 74,454 | |
|
| |
| |
| Total assets | | | $ | 722,731 | | $ | 730,727 | |
|
| |
| |
Liabilities & shareholders' equity: | | |
| Accounts payable | | | $ | 29,454 | | $ | 33,138 | |
| Income taxes payable | | | | 6,315 | | | 2,995 | |
| Accrued liabilities | | | | 95,197 | | | 104,580 | |
| Short-term notes payable and current portion of other obligations | | | | 15,446 | | | 17,845 | |
|
| |
| |
| Total current liabilities | | | | 146,412 | | | 158,558 | |
Long-term debt and other obligations | | | | 31,025 | | | 29,963 | |
| Deferred income tax liabilities | | | | 7,203 | | | 7,502 | |
| Minority interest | | | | 2,249 | | | 2,417 | |
| Shareholders' equity | | |
| Common stock | | | | 19,573 | | | 19,452 | |
| Additional paid-in capital | | | | 32,297 | | | 28,839 | |
| Retained earnings | | | | 512,216 | | | 513,152 | |
| Accumulated other comprehensive loss | | | | (28,244 | ) | | (29,156 | ) |
|
| |
| |
| Total shareholders' equity | | | | 535,842 | | | 532,287 | |
|
| |
| |
| Total liabilities & shareholders' equity | | | $ | 722,731 | | $ | 730,727 | |
|
| |
| |
| Three Months
Ended March 31,
|
|---|
Condensed Consolidated Statements of Cash Flows
| 2005
| 2004
|
| | | | | | | | | |
| Operating Activities | | |
| Net earnings | | | $ | 5,962 | | $ | 4,019 | |
| Provision for depreciation | | | | 6,482 | | | 5,610 | |
| Decrease in operating assets and liabilities - net | | | | 7,408 | | | 20,402 | |
|
| |
| |
| Net cash provided by operating activities | | | | 19,852 | | | 30,031 | |
| Investing Activities | | |
| Additions to property, plant and equipment | | | | (8,893 | ) | | (6,446 | ) |
| Sales of investments - net | | | | -- | | | 3,396 | |
| Payments for acquisitions of businesses | | | | -- | | | (52,959 | ) |
| Proceeds from divestiture of businesses | | | | -- | | | 862 | |
|
| |
| |
| Net cash (used in) investing activities | | | | (8,893 | ) | | (55,147 | ) |
| Financing Activities | | |
| Principal payments on short-term notes payable and other long-term liabilities | | | | (1,886 | ) | | (758 | ) |
| Cash dividends | | | | (6,418 | ) | | (6,260 | ) |
| Purchases of common stock | | | | (481 | ) | | (33 | ) |
| Stock options exercised | | | | 699 | | | 1,129 | |
|
| |
| |
| Net cash used in financing activities | | | | (8,086 | ) | | (5,922 | ) |
| Effect of exchange rate changes on cash and cash equivalents | | | | 262 | | | 223 | |
|
| |
| |
| Increase (decrease) in cash and cash equivalents | | | | 3,135 | | | (30,815 | ) |
| Cash and cash equivalents at beginning of year | | | | 202,761 | | | 189,976 | |
|
| |
| |
| Cash and cash equivalents at end of period | | | $ | 205,896 | | $ | 159,161 | |
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