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ATD’s Q1 Net Loss Widens To $16.29 Million

Huntersville, NC-based American Tire Distributors Holdings (ATD) saw its net loss more than double, going from $7.08 million a year ago to $16.29 million in the first quarter of 2013. The wider net loss was due, in large part, to costs stemming from the acquisitions of Consolidated Tire & Oil (CTO) and TriCan Tire Distributors.

Selling, general and administrative (SG&A) expenses for the quarter ended March 30, 2013 came in at $136.50 million — up $17.19 million, or 14.4 percent, on a year-over-year basis. The increase came primarily from incremental costs associated with new distribution centers, as well as the acquisition of CTO and TriCan. Combined, these factors added $11.70 million in incremental costs to the first quarter of 2013.

In addition, ATD also experienced a $4.10-million increase in its vehicle and occupancy expenses related to a higher overall consumption of fuel and other vehicle-related expenses, as well as increases in occupancy costs as the company expanded several of its distribution centers. Depreciation and amortization expense added an additional $2.10 million in costs to the quarter as ATD increased its capital expenditure costs for information system technology.

Transaction expenses for the quarter ended March 30, 2013 were $1 million and were primarily related to integration costs associated with the acquisition of TriCan, as well as expenses related to potential future acquisitions and other corporate initiatives.

SG&A expenses (as a percentage of net sales) increased from 15 percent to 16.3 percent year-over-year.

Net sales rose $45.85 million, or 5.8 percent, to $839.98 million. The increase in net sales was primarily driven by the combined results of new distribution centers, as well as the acquisition of CTO and TriCan. These growth initiatives added $65 million in incremental sales in the quarter.

However, this increase was partially offset by lower net tire pricing of $6.90 million, primarily driven by manufacturer price repositioning, one less selling day in 2013 as compared to 2012, and an overall softer sales unit environment.

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