Bandag net sales for 2003 decreased nine percent
For the full year 2003, Bandag reported consolidated net income of $60.2 million, or $3.11 per diluted share, compared to 2002 net income of $2.8 million, or $0.14 per diluted share, which included the write-off of goodwill, primarily of TDS (Tire Distribution Systems, Inc), of $47.3 million net of income tax. Consolidated net sales for 2003 decreased nine percent to $816.4 million from $900.5 million in 2002.
Bandag, Incorporated also reported consolidated net income of $29.1 million, or $1.50 per diluted share, for fourth quarter 2003, which compares to fourth quarter 2002 consolidated net income of $17.5 million, or $0.91 per diluted share. Net income for each of fourth quarter 2002 and 2003 included favorable tax adjustments of approximately $3.0 million, or $0.15 per diluted share, resulting primarily from the resolution of certain tax matters. Consolidated net sales for fourth quarter 2003 were $225.7 million, a decline of two percent compared to consolidated net sales of $231.0 million in the prior year period. The decline in net sales was largely attributable to the lower sales of Bandag’s distribution subsidiary TDS, primarily due to the planned divestitures and closures in 2002 and 2003.
Fourth quarter 2003 consolidated gross margin improved by three percentage points, primarily due to higher margins in the European and International business units, coupled with decreased TDS sales which carry lower margins. Unit volume in the European business unit decreased one percent while unit volume in the International business unit increased three percent. But operating income for the European business unit increased $4.2 million for the fourth quarter of 2003 as compared to the previous year, primarily due to the absence of $3.5 million of restructuring charges recorded in the fourth quarter of 2002.
Commenting on fourth quarter results and the overall outlook for 2004, Carver said, “Financial results have improved at our European, International and most particularly our TDS operations for the fourth quarter of 2003. Even though economic recovery remains in the early stages, our progress during 2003 positions Bandag well to benefit from new revenue opportunities and continued economic improvement.”