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EXHIBIT (d)(7)
TREADCO, INC. REPORTS 1999 FIRST QUARTER OPERATING RESULTS
April 14, 1999 02:49 PM FORT SMITH, Ark., April 14 /PRNewswire/ -- Treadco, Inc.
TRED today reported a net loss of $482,444, or $0.10 per common share (basic and
diluted), for the 1999 first quarter, which includes non-recurring charges of
approximately $0.06 per common share (basic and diluted). Without these non-
recurring charges, Treadco's loss was approximately $172,444, or $0.04 per
common share (basic and diluted). This compares to a net loss of $627,466, or a
loss of $0.12 per common share (basic and diluted), for the first quarter of
1998.
The non-recurring charges total approximately $310,000 and represent investment
banking and legal expenses related to the fairness opinion provided to the
special committee of independent directors of Treadco regarding the current
$9.00 per share tender offer by Arkansas Best Corporation for the Treadco shares
not already owned by Arkansas Best. The $310,000 non-tax deductible charge is
included in other non-operating expense.
During the quarter, Treadco had sales of $40.9 million which represents a 9.2%
increase over the same period of 1998. Treadco's operating loss was $255,414
compared to a 1998 first quarter operating loss of $576,494.
The foregoing release contains forward-looking statements that are based on
current expectations and are subject to a number of risks and uncertainties.
Actual results could differ materially from current expectations due to a number
of factors, including general economic conditions; competitive initiatives and
pricing pressures; availability and cost of capital; shifts in market demand;
weather conditions; government regulations; the performance and needs of
industries served by Treadco; actual future costs of operating expenses such as
the price of oil; self-insurance claims and employee wages and benefits; and the
timing and amount of capital expenditures.
The following table provides a breakdown of sales by category:
Three Months Ended
March 31
1999 1998 Increase
SALES
Retread $16,125,552 $15,503,889 4.0%
New Tires 20,255,206 18,289,075 10.8%
Service 4,563,636 3,711,984 22.9%
$40,944,394 $37,504,948 9.2%
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TREADCO, INC.
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31
1999 1998
SALES
Non-affiliates $40,460,114 $36,554,973
Affiliates 484,280 949,975
40,944,394 37,504,948
COSTS AND EXPENSES
Materials and cost of new tires 26,551,866 24,676,323
Salaries and wages 7,994,496 7,010,541
Depreciation and amortization 1,659,701 1,487,801
Administrative and general 4,993,745 4,906,777
41,199,808 38,081,442
OPERATING LOSS (255,414) (576,494)
OTHER INCOME
Interest income 10,700 11,121
Gain on asset sales 311,188 22,725
Other --- 51,139
321,888 84,985
OTHER EXPENSES
Tender offer response costs 310,000 ---
Interest 176,098 299,010
Amortization of goodwill 115,497 115,497
Amortization of noncompete agreements --- 65,312
Other 516 ---
602,111 479,819
LOSS BEFORE INCOME TAXES (535,637) (971,328)
FEDERAL AND STATE INCOME TAXES (CREDIT)
Current 39,485 (295,965)
Deferred (92,678) (47,897)
(53,193) (343,862)
NET LOSS $(482,444) $(627,466)
LOSS PER COMMON SHARE (Basic
and Diluted) $ (0.10) $ (0.12)
AVERAGE COMMON SHARES OUTSTANDING
(Basic and Diluted) 5,072,255 5,072,255
CASH DIVIDENDS PAID PER COMMON SHARE $ 0.00 $ 0.00
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TREADCO, INC.
CONDENSED BALANCE SHEETS (Unaudited)
March 31 December 31
1999 1998
ASSETS
Current assets $56,435,223 $59,565,917
Property, plant and equipment (net) 36,059,728 34,313,351
Deferred income taxes 160,956 145,526
Other assets 1,400,219 1,113,431
Goodwill (less amortization) 12,116,667 12,232,164
$106,172,793 $107,370,389
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $29,602,151 $35,892,840
Long-term debt (less current portion) 11,733,229 6,159,351
Other liabilities 104,057 102,398
Stockholders' equity 64,733,356 65,215,800
$106,172,793 $107,370,389
TREADCO, INC.
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31
1999 1998
OPERATING ACTIVITIES
Net cash provided (used) by
operating activities $(274,518) $2,248,700
INVESTING ACTIVITIES
Purchases of property, plant and
equipment, less capitalized leases (4,835,841) (821,181)
Construction in progress --- (641,671)
Proceeds from asset sales 2,131,185 22,725
Net cash used in investing activities (2,704,656) (1,440,127)
FINANCING ACTIVITIES
Borrowings under revolving
credit facility 19,600,000 14,400,000
Payments under revolving
credit facilities (13,550,000) (15,400,000)
Payments on long-term debt (597,782) (584,636)
Net increase (decrease) in
cash overdrafts (2,473,044) 776,063
Net cash provided (used) in
financing activities 2,979,174 (808,573)
NET DECREASE IN CASH AND
CASH EQUIVALENTS --- ---
Cash and cash equivalents at
beginning of period --- ---
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ --- $ ---
SOURCE Treadco, Inc.