CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER
DECEMBER 31, 1994 0-11579
TBC CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 31-0600670
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4770 Hickory Hill Road
Memphis, Tennessee 38141
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (901)363-8030
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
INDEX TO EXHIBITS at page 32 of this Report<PAGE>
Aggregate market value of outstanding shares
of Common Stock, par value $.10, held by
non-affiliates of the Company on December
31, 1994 (for purposes of this calcu-
lation, 2,420,509 shares beneficially
owned by directors and executive officers
of the Company were treated as being held
by affiliates of the Company)................. $220,717,377
Number of shares of Common Stock, par value $.10,
outstanding at the close of business on
December 31, 1994 ............................ 26,281,847
DOCUMENT INCORPORATED BY REFERENCE
TBC Corporation's Proxy Statement for its Annual Meeting of Stockholders to
be held on April 20, 1995. Definitive copies of the Proxy Statement will be
filed with the Commission within 120 days after the end of the Company's
fiscal year. Only such portions of the Proxy Statement as are specifically
incorporated by reference under Part III of this Report shall be deemed filed
as part of this Report.
_______________________
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PART I
Item 1. BUSINESS
TBC Corporation was incorporated in Delaware in 1970 under the name
THE Tire & Battery Corporation. It succeeded by merger to the business
previously conducted by Cordovan Associates, Incorporated, a Virginia
corporation. In 1983, the Company changed its name to TBC Corporation.
The Company and its wholly-owned subsidiaries are principally engaged
in the business of distributing automotive products in the automotive
replacement market. Unless the context indicates otherwise, the term
"Company" refers to TBC Corporation and its subsidiaries.
Products
The Company's products are made to the Company's order by leading
manufacturers and include tires, batteries, tubes, wheels, ride-control
products, filters, brake parts, chassis parts, automotive service equipment
and other products. Gross margin percentages on sales of tires and non-tire
products do not differ significantly. Substantially all of the Company's
products carry the Company's own brand names.
The Company's Cordovan, Multi-Mile and Sigma brand lines of tires are
three of the most complete lines in the replacement tire market, including
tires for passenger, truck, farm, industrial, recreational and other
applications. Sales of tires accounted for approximately 89% of the
Company's total sales in 1994, 88% in 1993 and 87% in 1992. The Company
believes it is the largest independent wholesale distributor of replacement
tires in the United States.
Other brands under which the Company's products are marketed include
Grand Prix, Grand Am, Grand Spirit, Wild Spirit, Grand Sport, Aqua-Flow,
Power King, Harvest King, and Astro-Lite.
Marketing and Distribution
The Company distributes its products other than those sold through
its Battery Associates, Inc. subsidiary ("TBC products") through a nationwide
network of distributors, some of which act as wholesalers, some of which
operate retail outlets, and some of which function as both wholesalers and
retailers. The loss of any major distributor of TBC products could have a
material adverse effect upon the Company's business pending the Company's
establishment of a replacement distributor.
Through its distributors and their customers, the Company estimates
that TBC products are sold by over 20,000 retail outlets. The retail outlets
handling TBC products consist primarily of independent tire dealers.
-3-<PAGE>
Battery Associates, Inc. distributes batteries and related products
for automobiles, trucks, motorcycles and other uses through its own
nationwide distribution network of approximately 140 wholesale and retail
distributors.
Major Customers
The Company's ten largest distributors accounted for 52% of the
Company's gross sales in 1994. Sales to Carroll's, Inc., Hapeville, Georgia,
excluding sales to distributors which operate under arrangements with and may
pay compensation to Carroll's, represented 15% of the Company's gross sales
(16% of net sales) in 1994. No distributor other than Carroll's individually
accounted for more than 10% of the Company's 1994 gross sales. See Item 13
of this Report for additional information concerning major customers.
Suppliers
The Company purchases its products, in finished form, from a number
of major rubber companies, battery manufacturers and other suppliers to the
automotive replacement market. Since the Company owns the brand names under
which most of its products are sold and, in the case of tires, many of the
molds in which they are made, the Company can choose the manufacturing
resource for each product in its line. The Company has not heretofore
experienced any difficulty in purchasing products in quantities needed by it,
but there can be no assurance that such difficulties will not be encountered
in the future.
The Kelly-Springfield Tire Company, a subsidiary of Goodyear Tire and
Rubber Company, has been a supplier to the Company since 1963. Kelly-
Springfield manufactured more than half of the tires purchased by the Company
in 1994, pursuant to a supply agreement entered into in 1977 and a 10-year
commitment signed in March 1994. The Company also has written contracts with
certain other suppliers.
Trademarks
Substantially all of the Company's products carry the Company's own
brand names.
The ability to offer products under recognized trademarks represents
an important marketing advantage in the automotive replacement industry, and
the Company regards its trademarks as valuable assets of its business. The
Company holds federal registrations for substantially all of its trademarks.
-4-<PAGE>
Seasonality and Inventory
The Company normally experiences its highest level of sales in the
second and third quarters of each year, with the first quarter exhibiting the
lowest level. Since 1990, first quarter sales have represented, on the
average, approximately 22% of annual sales; the second and third quarters
approximately 26% and 28%, respectively; and the fourth quarter approximately
24%. The Company's inventories generally fluctuate with anticipated seasonal
sales volume.
Orders for the Company's products are usually placed with the Company
by telephone, facsimile or computer transmission. Orders for TBC products
are filled either out of the Company's inventory or by direct shipment to the
customer from the manufacturers' plants at TBC's request. Sales made by
Battery Associates to its distributors are made by direct shipments to
customers from the manufacturers' plants at Battery Associates' request.
Since distributors look to the Company to fulfill their needs on
short notice, the Company maintains a large inventory of products. The
average of beginning and end-of-year inventories was $41,500,000 in 1994.
The Company's inventory turn rate (cost of sales, including the cost of
direct shipments from manufacturers to distributors, divided by average
inventory) was 12.0 for 1994.
Competition
The industry in which the Company operates is highly competitive, and
many of the Company's competitors are significantly larger and have greater
financial and other resources than the Company. The Company's direct
competitors at its level of distribution are the manufacturers, including its
own suppliers, and independent distributors of the products it sells.
Indirectly, the Company also competes against tire company stores, chain and
department stores, warehouse clubs, oil companies and automotive product
retailers, since retailers selling the Company's products must compete
against the products offered by other retailers. The Company believes it is
able to compete successfully in its industry because of its ability to offer
products under recognized brand names, its efficient distribution systems,
and its good relationships with its distributors and suppliers.
Employees
As of December 31, 1994, the Company employed 215 persons. The
Company considers its employee relations to be satisfactory. The Company's
employees are not currently represented by a union.
-5-<PAGE>
Item 2. PROPERTIES
The Company's executive offices and warehouse distribution facilities,
which total approximately 1,300,000 square feet under roof, are located in
Memphis, Tennessee. The Company owns the office building and one of its
warehouses. One warehouse is leased under an agreement expiring in 2005 and
two other warehouses are leased under agreements expiring in 2000. Battery
Associates, Inc. owns its facilities, which are also located in Memphis.
Item 3. LEGAL PROCEEDINGS
The Company is a defendant in a number of personal injury lawsuits
based upon alleged defects in products sold by the Company. Such actions are
commonplace in the automotive replacement business, particularly with
respect to tires. The Company believes that in substantially all such cases
it is covered by its manufacturers' indemnity agreements or their product
liability insurance. The Company also maintains its own product liability
insurance.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table presents certain information concerning the
executive officers of the Company. The term of office of all executive
officers of the Company is until the next Annual Meeting of Directors (April
20, 1995) or until their respective successors are elected.
Capacities in which
Individual Serves
Name Age the Company
Louis S. DiPasqua 60 President and Chief
Executive Officer
Kenneth P. Dick 48 Senior Vice President
Sales
Bob M. Hubbard 60 Senior Vice President
Purchasing and Engineering
Ronald E. McCollough 54 Senior Vice President
Operations
Larry D. Coley 37 Vice President and
Controller
Charles B. Quinn, Jr. 46 Vice President and
Treasurer
-6-<PAGE>
Mr. DiPasqua has been Chief Executive Officer since July 1994, and
President since joining the Company in 1991. Mr. DiPasqua has been a
director since 1991 and served as the Company's Chief Operating Officer from
1991 until July 1994. From 1989 until 1991, Mr. DiPasqua was Vice President,
Replacement Tire Sales and Marketing for the Goodyear Tire & Rubber Company
and prior to that was President and Chief Executive Officer of Kelly
Springfield Tire Company, a wholly-owned subsidiary of Goodyear. From 1984
to 1988, Mr. DiPasqua was Chairman and Managing Director of Goodyear Great
Britain.
Mr. Dick has served as Senior Vice President Sales of the Company
since 1988. From 1982 until his election as Senior Vice President Sales, Mr.
Dick served as Vice President Sales of the Company. Mr. Dick joined the
Company in 1971, and from 1980 until 1982, served as Sales Manager of the
Company.
Mr. Hubbard was elected Senior Vice President Purchasing and
Engineering of the Company in 1982. From 1973 until his election as a Senior
Vice President, Mr. Hubbard was Vice President Purchasing and Quality
Assurance of the Company.
Mr. McCollough has been Senior Vice President Operations of the
Company since 1982 and served as Controller of the Company from 1973 to 1985.
From 1978 until his election as a Senior Vice President, Mr. McCollough was
also Vice President Operations of the Company.
Mr. Coley has been a Vice President of the Company since 1993 and the
Controller of the Company since 1989. Prior to that, Mr. Coley was the
Company's Manager of Financial Reporting.
Mr. Quinn has been a Vice President of the Company since 1982 and the
Treasurer of the Company since 1980.
-7-<PAGE>
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Common Stock of the Company is traded on The Nasdaq Stock Market
under the symbol TBCC. As of December 31, 1994, the Company had
approximately 6,000 stockholders based on the number of holders of record and
an estimate of the number of individual participants represented by security
position listings. The Company did not declare any cash dividends during
1994 or 1993.
The following table sets forth for the periods indicated the high and
low sale prices for the Company's Common Stock as reported by the Nasdaq
National Market.
Price Range
High Low
Quarter ended
03/31/93............ 18.25 15.50
06/30/93............ 18.25 11.25
09/30/93............ 14.25 11.75
12/31/93............ 13.25 10.25
03/31/94............ 13.88 11.25
06/30/94............ 13.50 11.50
09/30/94............ 11.75 9.38
12/31/94............ 10.25 8.50
-8-<PAGE>
Item 6. SELECTED FINANCIAL DATA
Set forth below is selected financial information of the Company
for each year in the five-year period ended December 31, 1994. The selected
financial information should be read in conjunction with the consolidated
financial statements of the Company and notes thereto which appear elsewhere
in this Report. The Company did not declare any cash dividends during the
five-year period ended December 31, 1994.
Year ended December 31,
1994 1993 1992 1991 1990
INCOME STATEMENT
DATA (1):
Net sales ............. $551,920 $568,700 $569,508 $499,469 $498,912
Net income ............ 19,546 21,375 22,474 17,667 16,604
Earnings per share (2). .71 .74 .76 .59 .52
Average shares
and equivalents
outstanding (2).... 27,683 28,945 29,584 30,106 31,772
BALANCE SHEET
DATA (1):
Total assets .......... $169,682 $166,746 $176,859 $135,284 $136,920
Working capital ....... 91,279 95,114 80,630 71,959 65,910
Long-term debt......... - - - - -
Stockholders' equity .. 113,983 116,550 102,960 90,370 76,663
(1) In thousands except per share amounts.
(2) Reflects 3-for-2 stock splits effective November 15, 1991 and
December 11, 1992.
-9-<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
1994 Compared to 1993:
Net sales for 1994 were $551.9 million, a 3.0% decrease from 1993 net
sales of $568.7 million. Sales of tires accounted for approximately 89% of
total sales in 1994 compared to 88% in 1993. Tire sales declined 1.5%, the
result of a 1.7% decrease in unit tire shipments partially offset by a 0.2%
increase in the average tire sales price. The reduction in sales of non-tire
products was primarily due to lower unit shipments of batteries.
Cost of sales as a percentage of net sales increased from 90.4% in
1993 to 90.6% in 1994, due to higher net product costs from suppliers and an
increase in shipments direct from manufacturers rather than through the
Company's distribution facilities.
Distribution expenses decreased 9.2% in 1994 compared to 1993, due
principally to decreases in labor and related costs.
Selling and administrative expenses increased from the 1993 level,
due primarily to charges of $2.5 million for supplemental retirement
benefits. See Note 6 to the consolidated financial statements.
Net other income was higher in 1994 than in 1993, due primarily to
decreased interest expenses associated with lower bank borrowings.
1993 Compared to 1992:
Net sales for 1993 totaled $568.7 million, relatively unchanged from
the $569.5 million in net sales reported for 1992. Tire sales increased
0.8%, due to a 1.5% increase in the average tire sales price, which more than
offset a 0.7% decline in unit tire shipments. Sales of tires accounted for
approximately 88% of total sales in 1993 compared to 87% in 1992. The
reduction in sales of non-tire products was principally due to lower unit
shipments of batteries.
Cost of sales as a percentage of net sales increased from 90.1% in
1992 to 90.4% in 1993, due to higher net product costs from suppliers. This
factor more than offset the favorable effects of marketing programs
implemented in 1993 that shifted the Company's sales toward shipments through
the Company's distribution facilities rather than direct from manufacturers.
-10-<PAGE>
Distribution expenses increased 18.1% in 1993 compared to 1992, due
principally to an expansion completed in late 1992 to accommodate the planned
increase in shipments through the Company's distribution facilities.
Selling and administrative expenses decreased 17.8% in 1993 compared
to 1992, due primarily to lower compensation-related expenses, which included
a decrease in the provision for stock appreciation rights.
Net other income was lower in 1993 than in 1992, due principally to
an increase in net interest expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position and liquidity remain strong.
Working capital at December 31, 1994 was $91.3 million compared to $95.1
million at the end of 1993. The Company's current ratio was 2.66 at the end
of 1994 compared to 2.89 at December 31, 1993.
The Company has lines of credit available totaling $59.5 million, as
well as $20 million available under a bank revolving loan. At December 31,
1994, borrowings under these arrangements totaled $25.8 million. The Company
had no long-term debt at the end of 1994. Capital expenditures, primarily
for tire molds, totaled $3.6 million in 1994 and $3.1 million in 1993. The
Company expects to fund 1995 day-to-day operating expenses and normally
recurring capital expenditures out of operating funds and its present
financial resources. The Company had no material commitments for capital
expenditures at the end of 1994.
Cash generated by operations, together with the available credit
arrangements, enabled the Company to fund stock repurchases totaling $22.3
million in 1994 and $8.5 million in 1993, as well as the above-mentioned
capital expenditures. The latest repurchase plan, approved by the Board of
Directors on August 26, 1994, authorized the repurchase of a total of
1,500,000 shares of common stock in market and other transactions, of which
approximately 268,000 shares had been repurchased as of the end of 1994.
Included in other assets at December 31, 1994 and 1993 is a
promissory note receivable of $4,897,000 from a former distributor. (See
Note 3 to the Consolidated Financial Statements for a discussion of the legal
proceedings relative to that receivable.) Other assets increased $2.7
million during 1994, due primarily to the conversion of an amount due from
one distributor from an account receivable to a collateralized note
receivable.
-11-<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary financial information
required by this Item 8 are included on the following 12 pages of this
Report.
-12-<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders
TBC Corporation
We have audited the accompanying consolidated balance sheets of TBC
Corporation and Subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of TBC
Corporation and Subsidiaries as of December 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994 in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Memphis, Tennessee
January 27, 1995
-13-<PAGE>
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
December 31,
1994 1993
CURRENT ASSETS
Accounts and notes receivable, less
allowance for doubtful accounts
of $7,069 in 1994 and $7,828 in 1993:
Related parties $ 13,557 $ 14,207
Other 88,221 83,743
Total accounts and notes receivable 101,778 97,950
Inventories 39,754 43,313
Refundable federal and state income taxes 383 -
Deferred federal income taxes 1,928 2,166
Other current assets 2,482 1,881
Total current assets 146,325 145,310
PROPERTY, PLANT AND EQUIPMENT, AT COST
Land and improvements 1,560 1,545
Buildings 8,438 8,503
Equipment 16,943 16,370
Furniture and fixtures 2,101 1,606
Leasehold improvements 600 600
29,642 28,624
Less accumulated depreciation 15,020 13,196
Total property, plant and equipment 14,622 15,428
OTHER ASSETS 8,735 6,008
TOTAL ASSETS $169,682 $166,746
The accompanying notes are an integral part of the financial statements.
-14-<PAGE>
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31,
1994 1993
CURRENT LIABILITIES
Outstanding checks, net $ 4,257 $ 981
Notes payable to banks 25,780 26,091
Accounts payable, trade 20,763 18,482
Federal and state income taxes payable - 84
Other current liabilities 4,246 4,558
Total current liabilities 55,046 50,196
NONCURRENT LIABILITIES 653 -
STOCKHOLDERS' EQUITY
Common stock, $.10 par value,
shares issued and outstanding -
26,281,847 in 1994 and
28,377,020 in 1993 2,628 2,838
Additional paid-in capital 10,391 11,056
Retained earnings 100,964 102,656
Total stockholders' equity 113,983 116,550
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $169,682 $166,746
The accompanying notes are an integral part of the financial statements.
-15-<PAGE>
TBC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Years ended December 31,
1994 1993 1992
NET SALES* $551,920 $568,700 $569,508
COSTS AND EXPENSES
Cost of sales 500,085 514,174 513,334
Distribution 8,010 8,825 7,475
Selling and administrative 14,158 11,991 14,596
Other (income) expense - net (1,764) (915) (1,476)
Total costs and expenses 520,489 534,075 533,929
INCOME BEFORE INCOME TAXES 31,431 34,625 35,579
PROVISION FOR INCOME TAXES 11,885 13,250 13,105
NET INCOME $ 19,546 $ 21,375 $ 22,474
Earnings per share $ .71 $ .74 $ .76
Weighted average number of shares
and equivalents outstanding 27,683 28,945 29,584
* Including sales to related parties of $135,786, $140,343 and $149,505 in
the years ended December 31, 1994, 1993 and 1992, respectively.
The accompanying notes are an integral part of the financial statements.
-16-<PAGE>
TBC CORPORATION
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY
(In thousands)
Years ended December 31, 1992, 1993 and 1994
Common Stock Additional
Number of Paid-In Retained
Shares Amount Capital Earnings Total
BALANCE, JANUARY 1, 1992 19,847 $1,985 $ 9,690 $ 78,695 $ 90,370
Net income for year 22,474 22,474
Issuance of common stock
under stock option and
incentive plans, net 261 26 1,234 - 1,260
Repurchase and retirement
of common stock (754) (76) (339) (11,705) (12,120)
Effect of 3-for-2 stock split
on December 11, 1992 9,678 968 (970) - (2)
Tax benefit from exercise of
stock options - - 978 - 978
BALANCE, DECEMBER 31, 1992 29,032 2,903 10,593 89,464 102,960
Net income for year 21,375 21,375
Issuance of common stock
under stock option and
incentive plans 48 5 713 - 718
Repurchase and retirement
of common stock (703) (70) (272) (8,183) (8,525)
Tax benefit from exercise of
stock options - - 22 - 22
BALANCE, DECEMBER 31, 1993 28,377 2,838 11,056 102,656 116,550
Net income for year 19,546 19,546
Issuance of common stock
under stock option and
incentive plans 20 2 131 - 133
Repurchase and retirement
of common stock (2,115) (212) (837) (21,238) (22,287)
Tax benefit from exercise of
stock options - - 41 - 41
BALANCE, DECEMBER 31, 1994 26,282 $2,628 $10,391 $100,964 $113,983
The accompanying notes are an integral part of the financial statements.
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TBC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years ended December 31,
1994 1993 1992
Operating Activities:
Net income $ 19,546 $ 21,375 $ 22,474
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 4,012 3,838 3,197
Amortization 86 105 71
Deferred federal income taxes 238 839 (717)
Changes in operating assets
and liabilities:
Receivables (6,270) 1,981 (16,273)
Inventories 3,559 4,768 (20,193)
Other current assets (601) (240) 245
Other assets (375) - -
Outstanding checks, net 3,276 981 -
Accounts payable, trade 2,281 (13,674) 6,163
Federal and state income taxes
refundable or payable (426) (771) 265
Other current liabilities (312) (2,694) 1,785
Noncurrent liabilities 653 - -
Net cash provided by (used in)
operating activities 25,667 16,508 (2,983)
Investing Activities:
Purchase of property, plant and equipment (3,580) (3,078) (6,800)
Other 378 29 286
Net cash used in investing activities (3,202) (3,049) (6,514)
Financing Activities:
Net bank borrowings (repayments) under
short-term borrowing arrangements (311) (7,523) 21,969
Issuance of common stock under stock option
and incentive plans, net of repurchase 133 718 1,260
Repurchase and retirement of common stock (22,287) (8,525) (12,120)
Net cash provided by (used in)
financing activities (22,465) (15,330) 11,109
Increase (decrease) in cash and cash equivalents - (1,871) 1,612
Cash and cash equivalents:
Balance - Beginning of year - 1,871 259
Balance - End of year $ - $ - $ 1,871
Supplemental Disclosures of Cash Flow Information:
Cash paid for - Interest $ 1,324 $ 1,844 $ 1,101
- Income Taxes 12,073 13,182 13,557
Supplemental Disclosure of Non-Cash Financing
Activity:
Tax benefit from exercise of stock options $ 41 $ 22 $ 978
The accompanying notes are an integral part of the financial statements.
-18-<PAGE>
TBC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation - The accompanying financial statements
include the accounts of TBC Corporation and its subsidiaries, all of which
are wholly-owned. All significant intercompany transactions have been
eliminated.
Cash equivalents - Cash equivalents consist of short-term, highly
liquid investments which are readily convertible into cash.
Inventories - Inventories, consisting of automotive products held for
resale, are valued at the lower of cost (principally last in-first out) or
market. Current costs of inventories exceeded the LIFO value by $5,746,000
and $4,973,000 at December 31, 1994 and 1993, respectively.
Revenue recognition - Sales are recognized upon shipment of products.
Estimated costs of returns and allowance are accrued at the time products are
shipped.
Interest on early payments to suppliers for product - Interest income
associated with early payments to suppliers for product is recorded as a
reduction of product cost. The portion of this interest which was included
in the statements of income as a reduction to cost of sales represented 1.44%
of net sales in 1994, 1.45% in 1993 and 1.43% in 1992.
Concentrations of credit risk - The Company sells its products to
distributors in the automotive replacement market. The Company performs
ongoing credit evaluations of its customers and typically requires some form
of security, including collateral, guarantees or other documentation. The
Company maintains allowances for potential credit losses. The Company
maintains cash balances with financial institutions who maintain high credit
ratings. The Company has not experienced any losses with respect to bank
balances in excess of government-provided insurance.
Standard warranty - The costs of anticipated adjustments for defective
workmanship and materials that are the responsibility of the Company are
estimated and charged to expense currently.
Property, plant and equipment - Depreciation is computed on the
straight-line method over 3-20 years. Amounts expended for maintenance and
repairs are charged to operations, and expenditures for major renewals and
betterments are capitalized. When property, plant and equipment is retired
or otherwise disposed of, the related gain or loss is included in operations.
Income taxes - In 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Accordingly,
the Company follows the liability approach of accounting for income taxes as
prescribed by SFAS No. 109. Prior to 1993, the Company used the deferred
method of accounting for income taxes. The cumulative effect of applying
SFAS No. 109 was not material.
-19-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings per share - Earnings per share have been computed by
dividing net income by the weighted average number of shares of common stock
and equivalents outstanding, as restated for shares issued in the 3-for-2
stock split effective December 11, 1992. Common stock equivalents included
in the computation represent shares issuable upon assumed exercise of stock
options, which would have a dilutive effect in the respective years. Fully
diluted earnings per share did not significantly differ from primary earnings
per share in the years presented.
2. RELATED PARTY TRANSACTIONS
The Company's operations, consisting of the distribution of products
for the automotive replacement market, are managed through the Board of
Directors, members of which owned or are affiliated with companies which
owned approximately 9% of the Company's common stock at December 31, 1994.
Sales to distributors represented on the Board, including affiliates of such
distributors, accounted for approximately 25% of the Company's net sales
during 1994 and 1993 and 26% in 1992. One distributor accounted for
approximately 16% of net sales in 1994 and 1993 and 17% during 1992.
Accounts receivable resulting from transactions with related parties are
presented separately in the balance sheets.
3. OTHER ASSETS
Other assets consist of the following (in thousands):
December 31,
1994 1993
Notes receivable $7,900 $5,458
Intangible assets, net of amortization 835 546
Other - 4
$8,735 $6,008
The notes receivable totals include $4,897,000 from a former
distributor. The maker of the note was discharged in 1991 in a proceeding
under Chapter 11 of the Bankruptcy Code. The Company received distributions
totaling $290,000 from the bankruptcy proceeding. The Company holds written
guarantees of the distributor's account, absolute and continuing in form,
signed by the principal former owners and officers of the distributor and
their wives, upon which the Company filed suit in 1989. The defendants have
pleaded various defenses based on, among other things, an alleged oral
cancellation of the guarantees. The defendants have also filed a third party
complaint against the Company's former chief executive officer in which they
claim the right to recover against him for any liability they may have to the
-20-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
3. OTHER ASSETS (Continued)
Company. The Company believes, on the basis of applicable Tennessee law,
that those defenses are invalid and that there is no merit to the third-party
complaint. In October 1994, the Court granted the Company's motion to
exclude evidence of any oral cancellation of the guarantees. The Court's
order has been appealed and no date for trial has been scheduled. The
Company knows of no reason to believe that the defendants will be unable to
pay any judgment that may be entered against them in the action.
4. SHORT-TERM FINANCING AGREEMENTS
The Company has lines of credit for short-term borrowings totaling
$59,500,000, bearing interest at a negotiated rate not to exceed prime. In
addition, the Company may borrow up to $20,000,000 under a bank revolving
loan. The unused amount under these arrangements at December 31, 1994 was
$53,720,000. The weighted average interest rate on short-term borrowings at
December 31, 1994 and 1993 was 7.23% and 4.16%, respectively.
5. INCOME TAXES
Income taxes provided for the years ended December 31, 1994, 1993 and
1992 were as follows (in thousands):
1994 1993 1992
Current:
Federal $10,349 $11,095 $12,425
State 1,298 1,316 1,397
11,647 12,411 13,822
Deferred - Federal 238 839 (717)
$11,885 $13,250 $13,105
In 1994 and 1993, the provision for deferred income taxes is based on
the liability method prescribed by Statement of Financial Accounting
Standards No. 109 and represents the change in the Corporation's deferred
income tax asset during the year, including the effect of enacted tax rate
changes. Deferred income taxes arise from temporary differences between the
tax basis of the Company's assets and liabilities and their reported amounts
in the financial statements. The net deferred income tax assets in the
financial statements at December 31, 1994 and 1993 included approximately
$2,474,000 and $2,740,000, respectively, related to the allowance for
doubtful accounts and notes.
In 1992, the provision for deferred income taxes represented the tax
effect of differences in the timing of income and expense recognition for tax
and financial reporting purposes. Components of the provision for deferred
income taxes included depreciation, the provision for doubtful accounts and
notes, deferred compensation, stock appreciation rights, pension cost and
standard warranty. None of these differences individually had a material
effect on the provision for income taxes in 1992.
-21-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. INCOME TAXES (Continued)
The difference between the Company's effective income tax rate and the
statutory U. S. Federal income tax rate is reconciled as follows:
1994 1993 1992
Statutory U.S. Federal rate 35.0% 35.0% 34.0%
State income taxes 2.7 2.5 2.6
Other .1 .8 .2
Effective tax rate 37.8% 38.3% 36.8%
Tax benefits related to the exercise of certain stock options were
credited to additional paid-in capital and were not included in the provision
for income taxes for financial statement purposes.
6. RETIREMENT PLANS
The Company has a defined benefit pension plan covering substantially
all of its employees. The benefits are based on years of service and the
employee's final compensation. The Company's present funding policy is to
contribute annually the maximum amount that can be deducted for federal
income tax purposes. This amount is computed using a different actuarial
cost method and different assumptions from those used for financial reporting
purposes.
The following table sets forth the defined benefit pension plan's
funded status and amounts recognized in the Company's balance sheets (in
thousands):
December 31,
1994 1993
Actuarial present value of accumulated
benefit obligations, including
vested benefits of $2,863 in 1994
and $3,538 in 1993 $(3,202) $(3,917)
Actuarial present value of projected
benefit obligations for service
rendered to date $(4,553) $(5,442)
Plan assets at fair value, primarily
listed stocks and U.S. bonds 5,247 6,419
Plan assets over (under) projected
benefit obligation 694 977
Unrecognized net loss (gain)
from experience different from
that assumed 1,485 802
Unrecognized net assets at January 1,
1994 and 1993, being recognized
over 15.53 years (108) (173)
Unrecognized prior service cost 170 185
Prepaid pension cost $ 2,241 $ 1,791
-22-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
6. RETIREMENT PLANS (Continued)
The net expense for the defined benefit pension plan for 1994,
1993 and 1992 included the following (in thousands):
1994 1993 1992
Service cost $ 319 $ 289 $ 278
Interest cost 375 356 320
Return on plan assets (2) (862) (323)
Net amortization and deferral (633) 291 (178)
$ 59 $ 74 $ 97
The weighted average discount rate and rate of increase in future
compensation levels used in determining the 1994 actuarial present value of
the projected benefit obligation were 8% and 5%, respectively. The expected
long-term rate of return on assets was 10%.
The Company also has an unfunded supplemental retirement plan for
certain of its executive officers, to provide benefits in excess of amounts
permitted to be paid by its defined benefit pension plan under current tax
law. In addition, supplemental retirement provisions are included in the
employment agreement of the Company's President and Chief Executive Officer
and were included in the former Chief Executive Officer's employment
agreement. During 1994, the Company determined that expenses should be
recorded under these arrangements, and that the accumulated benefit
obligation, which was previously unaccrued, should be reflected as a
liability in the consolidated balance sheets until paid. As a result,
expenses for 1994 included supplemental retirement charges of $2,548,000. At
December 31, 1994, the projected benefit obligation was $1,362,000 and the
accumulated benefit obligation, which was reflected as a noncurrent
liability, totaled $653,000.
In 1994, the Company adopted an employee savings plan under Section
401(k) of the Internal Revenue Code, covering substantially all of its
employees. Contributions made by the Company to the 401(k) plan are based on
a specified percentage of employee contributions. The expense recorded in
1994 for the Company's contributions totaled $39,000.
7. STOCKHOLDERS' EQUITY
The Company is authorized to issue 50,000,000 shares of $.10 par value
common stock. In addition, 2,500,000 shares of $.10 par value preferred
stock are authorized, none of which were outstanding at December 31, 1994 or
1993.
-23-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
7. STOCKHOLDERS' EQUITY (Continued)
The Company has a 1983 stock option plan ("1983 Plan") and a 1989
stock incentive plan ("1989 Plan"). The 1989 Plan effectively replaced the
1983 Plan; however, all options and stock appreciation rights outstanding
under the 1983 Plan remain in full force and effect. The 1989 Plan provides
for the grant of options to purchase shares of the Company's common stock to
officers and other key employees of the Company upon terms and conditions
determined by a committee of the Board of Directors. The committee may also
grant stock appreciation rights, either singly or in tandem with stock
options, which entitle the holder to benefit from market appreciation in the
Company's common stock without requiring any payment on the part of the
holder.
The 1989 Plan also authorizes the committee to grant performance
awards and restricted stock awards to officers and other key employees.
Additionally, the 1989 Plan provides for the annual grant of restricted stock
with a market value of $5,000 to each non-employee director of the Company.
Each of these shares of restricted stock is accompanied by four options,
which are only exercisable under certain conditions and the exercise of which
results in the forfeiture of the associated share of restricted stock. The
options expire in one-third increments as the associated restricted stock
vests. Such tandem options are not included in the totals shown below for
outstanding options.
At December 31, 1993, the Company had options for 457,243 shares
outstanding, with exercise prices equal to market value on the date of grant,
ranging from $1.48 to $12.13 per share. No options were granted during 1994.
Options for 15,874 shares were exercised in 1994 at prices ranging from $5.03
to $6.55 per share, and options for 2,829 shares were forfeited. At December
31, 1994, options for 438,540 shares were outstanding with exercise prices
ranging from $1.48 to $12.13 per share. Stock appreciation rights for
options on 63,280 shares were outstanding at December 31, 1994 and 1993.
Amounts included in the statements of income relating to stock appreciation
rights included credits of $198,000 in 1994 and $162,000 in 1993 and a charge
of $540,000 in 1992.
The Company has a Stockholder Rights Plan whereby outstanding shares
of the Company's common stock are accompanied by preferred stock purchase
rights. The rights become exercisable ten days after either a person or
group has acquired 20% or more of the Company's common stock or the
commencement of a tender offer which would result in the offeror's ownership
of 30% or more of TBC's common stock. Under defined circumstances, the
rights allow TBC stockholders to purchase stock in either the Company or an
acquiring company at a price less than the market price. The rights expire
on July 31, 1998 unless redeemed at an earlier date.
In 1994 and 1993, shares of the Company's common stock were
repurchased and retired under plans approved by the Board of Directors. The
latest plan, approved on August 26, 1994, authorized the repurchase of
1,500,000 shares in market and other transactions. As of December 31, 1994,
approximately 268,000 shares had been repurchased under this plan.
-24-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
8. LEASES
Rental expense of $2,160,000, $2,149,000 and $1,512,000 was charged to
operations in 1994, 1993 and 1992, respectively. Minimum noncancelable real
property lease commitments at December 31, 1994, were as follows (in
thousands):
Year Amount
1995 $ 2,029
1996 1,981
1997 2,141
1998 1,179
1999 1,179
Thereafter through 2005 6,094
$14,603
The commitments relate substantially to distribution facilities in
Memphis, Tennessee. In addition to the above rental payments, the Company is
obligated in some instances to pay real estate taxes, insurance and certain
maintenance.
SUPPLEMENTARY DATA:
QUARTERLY FINANCIAL INFORMATION
Unaudited quarterly results for 1994 and 1993 are summarized as follows:
(In thousands, except per share amounts)
First Second Third Fourth
Quarter Quarter Quarter Quarter
1994
Net sales $133,780 $132,925 $157,513 $127,702
Cost of sales 120,963 119,988 143,929 115,205
Net income 5,086 3,603 5,664 5,193
Earnings per share* $ .18 $ .13 $ .21 $ .20
1993
Net sales $125,665 $154,398 $159,005 $129,632
Cost of sales 112,319 140,253 144,569 117,033
Net income 5,020 5,551 5,899 4,905
Earnings per share $ .17 $ .19 $ .21 $ .17
* The total of earnings per share for each of the quarters of 1994 does not
equal earnings per share for the year ended December 31, 1994, due to the
decrease in average shares outstanding.
-25-<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Except for information concerning executive officers of the Company
which is set forth in Part I of this Report, the information required by this
Item 10 is set forth in the Company's Proxy Statement for its Annual Meeting
of Stockholders to be held April 20, 1995, and is incorporated herein by this
reference.
Item 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is set forth in the
Company's Proxy Statement for its Annual Meeting of Stockholders to be held
April 20, 1995, and, with the exception of the information disclosed in the
Proxy Statement pursuant to Item 402(k) or 402(l) of Regulation S-K, is
incorporated herein by this reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is set forth in the
Company's Proxy Statement for its Annual Meeting of Stockholders to be held
April 20, 1995, and is incorporated herein by this reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 is set forth in the
Company's Proxy Statement for its Annual Meeting of Stockholders to be held
April 20, 1995, and is incorporated herein by this reference.
-26-<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
The following items, including consolidated financial statements of
the Company, are set forth at Item 8 of this Report:
Report of Independent Certified Public Accountants
Consolidated Balance Sheets - December 31, 1994, and 1993
Consolidated Statements of Income - Years ended December 31,
1994, 1993, and 1992
Consolidated Statements of Stockholders' Equity - Years ended
December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows - Years ended December 31,
1994, 1993, and 1992
Notes to Consolidated Financial Statements
(a) (2) FINANCIAL STATEMENT SCHEDULES
Report of Independent Certified Public Accountants (at p. 30 of
this Report)
Schedule VIII - Valuation and qualifying accounts (at p. 31
of this Report)
All other schedules are omitted because they are not applicable,
or not required, or because the required information is included
in the consolidated financial statements or notes thereto.
(a) (3) EXHIBITS
See INDEX to EXHIBITS included at p. 32 of this Report
(b) REPORTS ON FORM 8-K
The Company did not file any Reports on Form 8-K during the quarter
ended December 31, 1994.
-27-<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, TBC Corporation has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized in the
City of Memphis, Tennessee, on this 3rd day of February, 1995.
TBC CORPORATION
By: /s/ LOUIS S. DiPASQUA
Louis S. DiPasqua
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of TBC
Corporation and in the capacities and on the dates indicated:
Name Title Date
/s/ LOUIS S. DiPASQUA President, Chief February 3, 1995
Louis S. DiPasqua Executive Officer
and Director
/s/ RONALD E. McCOLLOUGH Senior Vice President February 3, 1995
Ronald E. McCollough Operations (principal
accounting and
financial officer)
* MARVIN E. BRUCE Chairman of the Board February 3, 1995
Marvin E. Bruce of Directors
* ROBERT E. CARROLL, JR. Director February 3, 1995
Robert E. Carroll, Jr.
* ROBERT H. DUNLAP Director February 3, 1995
Robert H. Dunlap
-28-<PAGE>
* STANLEY A. FREEDMAN Director February 3, 1995
Stanley A. Freedman
* DWAIN W. HIGGINBOTHAM Director February 3, 1995
Dwain W. Higginbotham
* RICHARD A. McSTAY Director February 3, 1995
Richard A. McStay
* ROBERT M. O'HARA Director February 3, 1995
Robert M. O'Hara
* NICHOLAS F. TAUBMAN Director February 3, 1995
Nicholas F. Taubman
* The undersigned by signing his name hereto does sign and execute
this Report on Form 10-K on behalf of each of the above-named directors of
TBC Corporation pursuant to a power of attorney executed by each such
director and filed with the Securities and Exchange Commission as an exhibit
to this Report.
/s/ LOUIS S. DiPASQUA
Louis S. DiPasqua
Attorney-in-Fact
-29- <PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders
TBC Corporation
Our report on the consolidated financial statements of TBC
Corporation and Subsidiaries is included on page 13 of this Form 10-K. In
connection with our audits of such financial statements, we have also audited
the related financial statement schedule listed in the index at Item 14(a)
(2) of this Form 10-K.
In our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial statements taken as a
whole, presents fairly, in all material respects, the information required to
be included therein.
COOPERS & LYBRAND L.L.P.
Memphis, Tennessee
January 27, 1995
-30-<PAGE>
TBC CORPORATION
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(In thousands)
Additions
Charged Charged
to Costs to
Balance and Other Balance
January 1, Expenses Accounts Deductions December 31,
1994
Warranty
reserve...... $ 861 $1,643 - $1,529 (1) $ 975
Allowance for
doubtful
accounts..... 7,828 1,320 - 2,079 (2) 7,069
1993
Warranty
reserve...... 755 1,466 - 1,360 (1) 861
Allowance for
doubtful
accounts..... 7,066 1,453 - 691 (2) 7,828
1992
Warranty
reserve...... 729 1,231 - 1,205 (1) 755
Allowance for
doubtful
accounts..... 5,879 2,172 - 985 (2) 7,066
(1) Amounts paid during current year and payable at year end less amount
payable at beginning of year.
(2) Accounts written off during year.
-31-<PAGE>
INDEX TO EXHIBITS
Located at
Manually
Numbered Page
(3) ARTICLES OF INCORPORATION AND BY-LAWS:
3.1 Certificate of Incorporation of TBC Corporation,
as amended April 29, 1988, was filed as Exhibit
3.1 to the TBC Corporation Annual Report on
Form 10-K for the year ended December 31, 1993 ..... *
3.2 Amendment to Restated Certificate of Incorporation
of TBC Corporation dated April 23, 1992, was filed
as Exhibit 3.2 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 1992 .. *
3.3 By-Laws of TBC Corporation as amended
January 13, 1988, were filed as Exhibit 3.3 to
the TBC Corporation Annual Report on Form 10-K
for the year ended December 31, 1993 ............... *
3.4 Amendment to By-Laws of TBC Corporation dated
January 6, 1993 was filed as Exhibit 3.4 to the
TBC Corporation Annual Report on Form 10-K for
the year ended December 31, 1992 .................. *
(4) INSTRUMENTS DEFINING THE RIGHTS OF
SECURITY HOLDERS, INCLUDING INDENTURES:
4.1 Amended and Restated Promissory Note, dated
June 30, 1993 from TBC Corporation to First
Tennessee Bank National Association, for
$15,000,000 line of credit, was filed as
Exhibit 4.1 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 1993 .. *
4.2 Promissory Note, dated June 30, 1993 from TBC
Corporation to First Tennessee Bank National
Association, for $44,500,000 line of credit,
was filed as Exhibit 4.2 to the TBC Corporation
Annual Report on Form 10-K for the year ended
December 31, 1993 .................................. *
4.3 Promissory Note (revolving loan), dated April 1,
1993 from TBC Corporation to Third National Bank
in Nashville, for $20,000,000, was filed as
Exhibit 4.3 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 1993 .. *
-32-<PAGE>
(10) MATERIAL CONTRACTS:
Management Contracts and Compensatory Plans
or Arrangements
10.1 Employment Agreement, dated February 18, 1991
between the Company and Mr. Louis S. DiPasqua,
together with Resolution adopted by the
Compensation Committee of the Company's Board
of Directors on January 8, 1992, was filed as
Exhibit 10.2 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 1991 .. *
10.2 Amendment to Executive Employment Agreement
effective July 1, 1992 between the Company and
Mr. Louis S. DiPasqua was filed as Exhibit 10.5
to the TBC Corporation Annual Report on Form 10-K
for the year ended December 31, 1992 .............. *
10.3 Agreement to Extend Executive Employment Agreement,
between the Company and Mr. Louis S. DiPasqua
effective January 20, 1994, was filed as Exhibit
10.1 to the TBC Corporation Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994 ..... *
10.4 Louis S. DiPasqua Trust Agreement dated as of
October 22, 1992 between the Company and First
Tennessee Bank National Association was filed as
Exhibit 10.6 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 1992 .. *
10.5 TBC Corporation 1983 Stock Option Plan, as amended
April 23, 1992 was filed as Exhibit 10.7 to the
TBC Corporation Annual Report on Form 10-K for
the year ended December 31, 1992 ................... *
10.6 TBC Corporation 1989 Stock Incentive Plan, as
amended April 23, 1992 was filed as Exhibit 10.8
to the TBC Corporation Annual Report on Form 10-K
for the year ended December 31, 1992 ............... *
10.7 TBC Corporation Deferred Compensation Plan for
Directors was filed as Exhibit 10.10 to the TBC
Corporation Annual Report on Form 10-K for the
year ended December 31, 1993 ....................... *
10.8 Executive Employment Agreement dated as of
November 1, 1988 between the Company and Mr.
Kenneth P. Dick, including Trust Agreement as
Exhibit A thereto, as extended as of November 1,
1991 and as amended as of July 1, 1992, was
filed as Exhibit 10.10 to the TBC Corporation
Annual Report on Form 10-K for the year ended
December 31, 1992 .................................. *
-33-<PAGE>
10.9 Agreement to Extend Executive Employment Agreement,
between the Company and Mr. Kenneth P. Dick dated
October 31, 1994 ................................... 38
10.10 Executive Employment Agreement dated as of
November 1, 1988 between the Company and Mr.
Bob M. Hubbard, including Trust Agreement as
Exhibit A thereto, as extended as of November 1,
1991 and as amended as of July 1, 1992, was
filed as Exhibit 10.11 to the TBC Corporation
Annual Report on Form 10-K for the year ended
December 31, 1992 .................................. *
10.11 Agreement to Extend Executive Employment Agreement,
between the Company and Mr. Bob M. Hubbard dated
October 31, 1994 ................................... 39
10.12 Executive Employment Agreement dated as of
November 1, 1988 between the Company and Mr.
Ronald E. McCollough, including Trust Agreement
as Exhibit A thereto, as extended as of November 1,
1991 and as amended as of July 1, 1992, was
filed as Exhibit 10.12 to the TBC Corporation
Annual Report on Form 10-K for the year ended
December 31, 1992 .................................. *
10.13 Agreement to Extend Executive Employment Agreement,
between the Company and Mr. Ronald E. McCollough
dated October 31, 1994 ............................. 40
10.14 TBC Corporation Management Incentive Compensation
Plan, as amended January 8, 1992, was filed as
Exhibit 10.7 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 1991 .. *
10.15 TBC Corporation Executive Supplemental Retirement
Plan, as amended October 22, 1992, was filed as
Exhibit 10.14 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 1992 .. *
10.16 1994 Amendment to the TBC Corporation Executive
Supplemental Retirement Plan, dated
November 30, 1994 .................................. 41
Other Material Contracts
10.17 Lease Agreement, dated February 25, 1980, between
TBC Corporation and Vantage-Memphis, Inc. was
filed as Exhibit 10.2 to TBC Corporation Registra-
tion Statement on Form S-1 (Reg. No. 2-83216) ...... *
-34-<PAGE>
10.18 Modification and Ratification of Lease, dated
April 16, 1991, between TBC Corporation and
Vantage-Memphis, Inc. was filed as Exhibit 10.11
to the TBC Corporation Annual Report on Form 10-K
for the year ended December 31, 1991 ............... *
10.19 Lease Agreement, dated September 23, 1992, between
TBC Corporation and Weston Management Company
(for Weston Building #105) was filed as Exhibit
10.18 to the TBC Corporation Annual Report on
Form 10-K for the year ended December 31, 1992 ..... *
10.20 Lease Agreement, dated September 23, 1992, between
TBC Corporation and Weston Management Company
(for Weston Building #108) was filed as Exhibit
10.19 to the TBC Corporation Annual Report on
Form 10-K for the year ended December 31, 1992 ..... *
10.21 Form of TBC Corporation's standard Distributor
Agreement was filed as Exhibit 10.1 to the TBC
Corporation Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994 ........................ *
10.22 Agreement, dated October 1, 1977, between TBC
Corporation and The Kelly-Springfield Tire
Company, including letter dated June 30, 1978,
was filed as Exhibit 10.6 to TBC Corporation
Registration Statement on Form S-1
(Reg. No. 2-83216) ................................. *
10.23 Ten-Year Commitment Agreement, dated March 21, 1994,
between the Company and The Kelly-Springfield Tire
Company, was filed as Exhibit 10.2 to the TBC
Corporation Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994 ....................... *
10.24 Agreement, effective January 1, 1994, signed
April 25, 1994, between the Company and Cooper
Tire & Rubber Company, was filed as Exhibit 10.2 to
the TBC Corporation Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994 ................ *
(21) SUBSIDIARIES OF THE COMPANY:
21.1 List of the names and jurisdictions of
incorporation of the subsidiaries of the Company ... 43
-35-<PAGE>
(23) CONSENTS OF EXPERTS AND COUNSEL:
23.1 Consent of Coopers & Lybrand L.L.P., Independent
Certified Public Accountants, to incorporation by
reference of their report dated January 28, 1994
in Post-Effective Amendment No. 1 to Registration
Statement on Form S-8 for the Company's 1983 Stock
Option Plan (Reg. No. 2-97888) and Registration
Statement on Form S-8 for the Company's 1989 Stock
Incentive Plan (Reg. No. 33-43166) ................. 44
(24) POWER OF ATTORNEY:
24.1 Power of attorney of each person who signed this
Annual Report on Form 10-K on behalf of another
pursuant to a power of attorney .................... 45
(99) ADDITIONAL EXHIBITS:
99.1 Rights Agreement, dated as of July 21, 1988,
between TBC Corporation and the First National
Bank of Boston, as Rights Agent, was filed as an
Exhibit to the Company's Registration Statement
on Form 8-A dated July 21, 1988. The Rights
Agreement includes as Exhibit A the form of
Certificate of Designation, Preferences and
Rights; as Exhibit B, the form of Rights
Certificate; and as Exhibit C, the form of
Summary of Rights .................................. *
"*" Indicates that the Exhibit is incorporated by
reference into this Annual Report on Form 10-K
from a previous filing with the Commission.
-36-<PAGE>
TBC CORPORATION
EXHIBITS
TO
FORM 10-K
FOR THE YEAR ENDED
DECEMBER 31, 1994
-37-<PAGE>
EXHIBIT 10.9
AGREEMENT TO EXTEND
EXECUTIVE EMPLOYMENT AGREEMENT
THE UNDERSIGNED HEREBY AGREE to extend the Executive Employment Agreement,
dated November 1, 1988, between them (as later amended and extended, the
"Agreement"), for a period of three years until October 31, 1997, or one year
after the occurrence of a Change of Control of the Company (as defined in the
Agreement), in the event a Change of Control of the Company shall have
occurred on or prior to October 31, 1997.
IT IS FURTHER AGREED that the amount of the Executive's salary referred to
in Section 3 of the Agreement shall not be less than $140,476 per year.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the 31st day of October, 1994.
TBC CORPORATION
By /s/ Louis S. DiPasqua
Louis S. DiPasqua,
President and Chief Operating
Officer
/s/ Kenneth P. Dick
Kenneth P. Dick
-38-<PAGE>
EXHIBIT 10.11
AGREEMENT TO EXTEND
EXECUTIVE EMPLOYMENT AGREEMENT
THE UNDERSIGNED HEREBY AGREE to extend the Executive Employment Agreement,
dated November 1, 1988, between them (as later amended and extended, the
"Agreement"), for a period of three years until October 31, 1997, or one year
after the occurrence of a Change of Control of the Company (as defined in the
Agreement), in the event a Change of Control of the Company shall have
occurred on or prior to October 31, 1997.
IT IS FURTHER AGREED that the amount of the Executive's salary referred to
in Section 3 of the Agreement shall not be less than $179,200 per year.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the 31st day of October, 1994.
TBC CORPORATION
By /s/ Louis S. DiPasqua
Louis S. DiPasqua,
President and Chief Operating
Officer
/s/ Bob M. Hubbard
Bob M. Hubbard
-39-<PAGE>
EXHIBIT 10.13
AGREEMENT TO EXTEND
EXECUTIVE EMPLOYMENT AGREEMENT
THE UNDERSIGNED HEREBY AGREE to extend the Executive Employment Agreement,
dated November 1, 1988, between them (as later amended and extended, the
"Agreement"), for a period of three years until October 31, 1997, or one year
after the occurrence of a Change of Control of the Company (as defined in the
Agreement), in the event a Change of Control of the Company shall have
occurred on or prior to October 31, 1997.
IT IS FURTHER AGREED that the amount of the Executive's salary referred to
in Section 3 of the Agreement shall not be less than $162,252 per year.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the 31st day of October, 1994.
TBC CORPORATION
By /s/ Louis S. DiPasqua
Louis S. DiPasqua,
President and Chief Operating
Officer
/s/ Ronald E. McCollough
Ronald E. McCollough
-40-<PAGE>
EXHIBIT 10.16
1994 AMENDMENT TO THE
TBC CORPORATION
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
TBC Corporation ("TBC") maintains the TBC Corporation Executive
Supplemental Retirement Plan (the "Plan"). TBC wishes to amend the Plan.
NOW, THEREFORE, the Plan is amended as follows:
I. The term "Retirement Plan", as it is used in the Plan, means the
Retirement Plan for Employees of TBC Corporation, as amended and restated,
effective November 1, 1989 and as it may be amended from time to time.
II. The last sentence of Section 3 is eliminated in its entirety and the
following language is added to the end of Section 3, effective with respect
to Participants who retire from TBC on or after October 13, 1994:
Notwithstanding the above, the amount calculated in paragraph (a) above
shall not be less than the Participant's "Floor Benefit". The
Participant's Floor Benefit is determined as follows:
1. If a Participant has both attained his Normal Retirement Date (as
defined in the Retirement Plan) and completed at least 20 years of
service (Vesting or Credited Service as defined in the Retirement
Plan or as provided in any agreement between the Participant and
TBC), the Participant's Floor Benefit shall be an amount (expressed
as a single life annuity) equal to 60% of the average of the three
(3) highest consecutive calendar years of the Participant's
Compensation (as defined above) within the last ten (10) completed
calendar years during which the Participant received any
Compensation, assuming for purposes of this computation that
Sections 415 and 401 (a) (17) of the Code had not been enacted.
2. If a Participant has attained his Normal Retirement Date, but has not
completed at least 20 years of service, the Participant's Floor
Benefit shall be the result derived by multiplying the amount
determined in subparagraph 1, above, by a fraction (not to exceed 1),
the numerator of which is the Participant's years of service and the
denominator of which is 20;
3. If a Participant has not attained his Normal Retirement Date, but has
completed at least 20 years of service, the amount of the
Participant's Floor Benefit shall be the result derived by
multiplying the amount determined in subparagraph 1, above, by a
fraction, the numerator
-41-<PAGE>
of which is the Participant's years of service and the denominator of
which is the Participant's years of service he would have had if he
had continued to be employed by TBC until his Normal Retirement Date.
Notwithstanding the above, if a Participant described in this
subparagraph 3 begins to receive payment of his benefits under this
Plan before his Normal Retirement Date, the Participant's Floor
Benefit shall be the amount determined under the immediately
preceding sentence multiplied by the early retirement reduction
factor described in Section 2.2 of the Retirement Plan.
4. If a Participant has not attained his Normal Retirement Date and has
not completed at least 20 years of service, the amount of the
Participant's Floor Benefit shall be the result derived by
multiplying the amount determined in subparagraph 1, above
a) by a fraction (not to exceed 1), the numerator of which is the
Participant's years of service he would have had if he had
continued to be employed by TBC until his Normal Retirement Date
and the denominator of which is 20, and
b) by a fraction, the numerator of which is the Participant's years
of service and the denominator of which is the Participant's
years of service he would have had if he had continued to be
employed by TBC until his Normal Retirement Date.
Notwithstanding the above, if a Participant described in this
subparagraph 4 begins to receive payment of his benefits under this
Plan before his Normal Retirement Date, the Participant's Floor
Benefit shall be the amount determined under the immediately
preceding sentence multiplied by the early retirement reduction
factor described in Section 2.2 of the Retirement Plan.
III. In all respects not amended, the Plan is hereby ratified and
confirmed.
* * * * * * * *
IN WITNESS WHEREOF, TBC has caused this amendment to be executed this
30th day of November, 1994.
TBC CORPORATION
BY: /s/ Ronald E. McCollough
Ronald E. McCollough
Senior Vice President
-42-<PAGE>
EXHIBIT 21.1
SUBSIDIARIES
OF
TBC CORPORATION
TBC Corporation has three subsidiaries, each of which is wholly-owned
by TBC Corporation. The subsidiaries and their states of incorporation are
as follows:
Name of Subsidiary State of Incorporation
Battery Associates, Inc. Delaware
TBC International, Inc. Delaware
TBC Sales, Inc. Delaware
-43-<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the amended form S-8
registration statement for TBC Corporation's 1983 Stock Option Plan and the
form S-8 registration statement for TBC Corporation's 1989 Stock Incentive
Plan of our report dated January 27, 1995, on our audits of the consolidated
financial statements and financial statement schedules of TBC Corporation as
of December 31, 1994 and 1993 and for the years ended December 31, 1994, 1993
and 1992, which report is included in this Annual Report on Form 10-K.
COOPERS & LYBRAND
Memphis, Tennessee
January 27, 1995
-44-<PAGE>
EXHIBIT 24.1
TBC CORPORATION
LIMITED POWER OF ATTORNEY
WHEREAS, TBC Corporation (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1994;
NOW, THEREFORE, the undersigned, in his capacity as a director of the
Company, hereby appoints Louis S. DiPasqua and/or Ronald E. McCollough, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place and
stead, the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (including any amendment to such report), and any and all other
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Either of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in the aforesaid capacity, every act whatsoever
necessary or desirable to be done, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of either of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
1st day of February, 1995.
/s/ Marvin E. Bruce
Marvin E. Bruce
-45-<PAGE>
TBC CORPORATION
LIMITED POWER OF ATTORNEY
WHEREAS, TBC Corporation (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1994;
NOW, THEREFORE, the undersigned, in his capacity as a director of the
Company, hereby appoints Louis S. DiPasqua and/or Ronald E. McCollough, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place and
stead, the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (including any amendment to such report), and any and all other
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Either of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in the aforesaid capacity, every act whatsoever
necessary or desirable to be done, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of either of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
1st day of February, 1995.
/s/ Robert E. Carroll, Jr.
Robert E. Carroll, Jr.
-46-<PAGE>
TBC CORPORATION
LIMITED POWER OF ATTORNEY
WHEREAS, TBC Corporation (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1994;
NOW, THEREFORE, the undersigned, in his capacity as a director of the
Company, hereby appoints Louis S. DiPasqua and/or Ronald E. McCollough, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place and
stead, the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (including any amendment to such report), and any and all other
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Either of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in the aforesaid capacity, every act whatsoever
necessary or desirable to be done, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of either of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
1st day of February, 1995.
/s/ Robert H. Dunlap
Robert H. Dunlap
-47-<PAGE>
TBC CORPORATION
LIMITED POWER OF ATTORNEY
WHEREAS, TBC Corporation (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1994;
NOW, THEREFORE, the undersigned, in his capacity as a director of the
Company, hereby appoints Louis S. DiPasqua and/or Ronald E. McCollough, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place and
stead, the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (including any amendment to such report), and any and all other
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Either of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in the aforesaid capacity, every act whatsoever
necessary or desirable to be done, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of either of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
1st day of February, 1995.
/s/ Stanley A. Freedman
Stanley A. Freedman
-48-<PAGE>
TBC CORPORATION
LIMITED POWER OF ATTORNEY
WHEREAS, TBC Corporation (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1994;
NOW, THEREFORE, the undersigned, in his capacity as a director of the
Company, hereby appoints Louis S. DiPasqua and/or Ronald E. McCollough, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place and
stead, the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (including any amendment to such report), and any and all other
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Either of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in the aforesaid capacity, every act whatsoever
necessary or desirable to be done, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of either of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
1st day of February, 1995.
/s/ Dwain W. Higginbotham
Dwain W. Higginbotham
-49-<PAGE>
TBC CORPORATION
LIMITED POWER OF ATTORNEY
WHEREAS, TBC Corporation (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1994;
NOW, THEREFORE, the undersigned, in his capacity as a director of the
Company, hereby appoints Louis S. DiPasqua and/or Ronald E. McCollough, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place and
stead, the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (including any amendment to such report), and any and all other
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Either of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in the aforesaid capacity, every act whatsoever
necessary or desirable to be done, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of either of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
31st day of January, 1995.
/s/ Richard A. McStay
Richard A. McStay
-50-<PAGE>
TBC CORPORATION
LIMITED POWER OF ATTORNEY
WHEREAS, TBC Corporation (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1994;
NOW, THEREFORE, the undersigned, in his capacity as a director of the
Company, hereby appoints Louis S. DiPasqua and/or Ronald E. McCollough, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place and
stead, the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (including any amendment to such report), and any and all other
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Either of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in the aforesaid capacity, every act whatsoever
necessary or desirable to be done, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of either of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
1st day of February, 1995.
/s/ Robert M. O'Hara
Robert M. O'Hara
-51-<PAGE>
TBC CORPORATION
LIMITED POWER OF ATTORNEY
WHEREAS, TBC Corporation (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1994;
NOW, THEREFORE, the undersigned, in his capacity as a director of the
Company, hereby appoints Louis S. DiPasqua and/or Ronald E. McCollough, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place and
stead, the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (including any amendment to such report), and any and all other
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Either of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in the aforesaid capacity, every act whatsoever
necessary or desirable to be done, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of either of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
1st day of February, 1995.
/s/ Nicholas F. Taubman
Nicholas F. Taubman
-52-<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> (4,257)<F1>
<SECURITIES> 0
<RECEIVABLES> 108,847
<ALLOWANCES> 7,069
<INVENTORY> 39,754
<CURRENT-ASSETS> 146,325
<PP&E> 29,642
<DEPRECIATION> 15,020
<TOTAL-ASSETS> 169,682
<CURRENT-LIABILITIES> 55,046
<BONDS> 0
<COMMON> 2,628
0
0
<OTHER-SE> 111,355
<TOTAL-LIABILITY-AND-EQUITY> 169,682
<SALES> 551,920
<TOTAL-REVENUES> 551,920
<CGS> 500,085
<TOTAL-COSTS> 500,085
<OTHER-EXPENSES> 20,404
<LOSS-PROVISION> 1,320
<INTEREST-EXPENSE> 0<F2>
<INCOME-PRETAX> 31,431
<INCOME-TAX> 11,885
<INCOME-CONTINUING> 19,546
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,546
<EPS-PRIMARY> .71
<EPS-DILUTED> 0<F2>
<FN>
<F1>THIS ITEM IS SHOWN UNDER THE CATEGORY "OUTSTANDING CHECKS, NET" ON THE
CONSOLIDATED BALANCE SHEETS.
<F2>THESE ITEMS ARE NOT SEPARATELY REPORTED ON TBC CORPORATION'S FORM 10-K.
</FN>
</TABLE>
