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, 1995 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. [ ]
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, 1995 (for purposes of this calculation,
2,099,738 shares beneficially owned by
directors and executive officers of the
Company were treated as being held
by affiliates of the Company)................. $187,025,328
Number of shares of Common Stock, par value $.10,
outstanding at the close of business on
December 31, 1995 ............................ 23,783,834
DOCUMENT INCORPORATED BY REFERENCE
TBC Corporation's Proxy Statement for its Annual Meeting of Stockholders to
be held on April 25, 1996. 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's business began in 1956 under the name Cordovan
Associates, Incorporated. The present company was incorporated in Delaware
in 1970 under the name THE Tire & Battery 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 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 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 proprietary 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 1995 and 1994 and 88% in 1993. 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 network of
distributors in the United States, Canada and Mexico. Some of these
distributors act as wholesalers, some operate retail outlets, and some
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 wholesale and retail distributors.
Major Customers
The Company's ten largest distributors accounted for 51% of the
Company's gross sales in 1995. 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
in 1995. No distributor other than Carroll's individually accounted for
more than 10% of the Company's 1995 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. 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 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 division 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 1995, pursuant to a supply agreement entered into in 1977 and a 10-year
commitment signed in 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 1991, 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 computer transmission, facsimile or telephone. 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 $44,600,000 in 1995. The Company's
inventory turn rate (cost of sales, including the cost of direct shipments from
manufacturers to distributors, divided by average inventory) was 10.9 for 1995.
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 quality
products under its proprietary brand names, its efficient distribution systems,
and its good relationships with its distributors and suppliers.
Employees
As of December 31, 1995, the Company employed 271 persons. The Company
considers its employee relations to be satisfactory. The Company's employees
are not currently represented by a union.
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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. The
Company's Northern States Tire, Inc. subsidiary owns facilities in New
Hampshire, Vermont and Maine and leases distribution facilities in
Massachusetts.
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
25, 1996) or until their respective successors are elected.
Capacities in which
Individual Serves
Name Age the Company
Louis S. DiPasqua 61 President and Chief
Executive Officer
Kenneth P. Dick 49 Senior Vice President
Sales
Bob M. Hubbard 61 Senior Vice President
Purchasing and Engineering
Ronald E. McCollough 55 Senior Vice President
Operations
Larry D. Coley 38 Vice President and
Controller
Charles B. Quinn, Jr. 47 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 division 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, 1995, the Company had
approximately 6,100 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
1995 or 1994.
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
03/31/94............ 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
03/31/95............ 10.50 8.75
06/30/95............ 11.75 10.00
09/30/95............ 11.00 8.88
12/31/95............ 9.75 6.63
-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, 1995. 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, 1995.
Year ended December 31,
1995 1994 1993 1992 1991
INCOME STATEMENT
DATA (1):
Net sales ............. $536,122 $551,920 $568,700 $569,508 $499,469
Net income ............ 15,249 19,546 21,375 22,474 17,667
Earnings per share (2). .62 .71 .74 .76 .59
Average shares
and equivalents
outstanding (2).... 24,683 27,683 28,945 29,584 30,106
BALANCE SHEET
DATA (1):
Total assets .......... $179,952 $169,682 $166,746 $176,859 $135,284
Working capital ....... 76,600 91,279 95,114 80,630 71,959
Long-term debt ........ 555 - - - -
Stockholders' equity .. 104,823 113,983 116,550 102,960 90,370
(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
1995 Compared to 1994:
Net sales for 1995 decreased 2.9% from the 1994 level, due principally
to a 3.1% decline in tire sales. Sales of tires accounted for approximately
89% of total sales in both 1995 and 1994. Unit tire shipments decreased 6.5%
from the year-earlier level, reflecting increased competitive pressures and
sluggishness in the replacement tire market during 1995. Partially offsetting
the lower unit volume was a 3.7% increase in the average tire sales price,
primarily related to the effect of industry price increases since the beginning
of 1994.
Cost of sales as a percentage of net sales increased from 90.6% in
1994 to 91.2% in 1995. The fluctuation was due to the combined effects of
the above-noted competitive pressures and a shift in the Company's sales
toward shipments direct from manufacturers rather than through the Company's
distribution facilities. Margins on shipments direct from manufacturers are
typically lower than through the Company's own facilities.
Distribution expenses were relatively unchanged in the current year
compared to the year-earlier level.
Selling and administrative expenses declined slightly in 1995 due to
the recognition in 1994 of a charge of $2.5 million for supplemental retirement
benefits. Excluding that charge, selling and administrative expenses increased
principally due to the addition of facilities in the northeastern United States
in 1995, higher pension costs and increased selling expenses.
Net other income/expense shifted from net other income of $1.8
million in 1994 to net other expense of $520,000 in 1995. The fluctuation
was due primarily to increased interest expenses associated with higher bank
borrowing levels and interest rates than in 1994. The increase in average
bank borrowings in 1995 was largely related to repurchases of common stock
and higher inventory levels during the year.
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.
-10-<PAGE>
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.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position and liquidity are strong. At
December 31, 1995, working capital totaled $76.6 million and the current
ratio was 2.04. At the end of 1994, working capital was $91.3 million and
the Company's current ratio was 2.66.
The Company has arrangements for short-term borrowings totaling $73.0
million. At December 31, 1995, borrowings under these arrangements totaled
$50.8 million. Capital expenditures totaled $9.2 million in 1995, which
included the purchase of certain distribution facilities and equipment in the
northeastern United States and expenditures of $4.2 million for tire molds.
This was compared to capital expenditures of $3.6 million in 1994,
principally for tire molds. The Company expects to fund 1996 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 1995.
Cash generated by operations, together with the available credit
arrangements, enabled the Company to fund stock repurchases totaling $24.6
million in 1995 and $22.3 million in 1994, as well as the above-mentioned
capital expenditures. The latest repurchase plans, approved by the Board of
Directors in 1995, authorized the repurchase of a total of 2,500,000 shares
of common stock in market and other transactions, of which approximately
1,285,000 shares had been repurchased as of the end of 1995.
Included in other assets at December 31, 1995 and 1994 is a
promissory note receivable of $4,897,000 from a former distributor. (See
Note 4 to the Consolidated Financial Statements for a discussion of the legal
proceedings relative to that receivable.) Other assets increased $1.9
million during 1995, due primarily to investments by the Company in a Mexican
joint venture and a domestic import/export joint venture.
-11-<PAGE>
Accounts payable decreased from $20.8 million at December 31, 1994 to
$10.1 million at the end of 1995, as the Company took advantage of certain
early payment terms from suppliers which were not offered at the end of 1994.
Notes payable to banks increased from $25.8 million at December 31,
1994 to $50.8 million at December 31, 1995. This increase was due to the
above-noted early payment of accounts payable, as well as increased
inventories and the aforementioned capital expenditures and stock repurchases
during 1995.
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, 1995 and 1994, and the
related consolidated statements of income, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1995.
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, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Memphis, Tennessee
January 26, 1996
-13-<PAGE>
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
December 31,
1995 1994
CURRENT ASSETS
Accounts and notes receivable, less
allowance for doubtful accounts
of $8,014 in 1995 and $7,069 in 1994:
Related parties $ 17,208 $ 13,557
Other 78,330 88,221
Total accounts and notes receivable 95,538 101,778
Inventories 49,538 39,754
Refundable federal and state income taxes 472 383
Deferred federal income taxes 2,389 1,928
Other current assets 2,252 2,482
Total current assets 150,189 146,325
PROPERTY, PLANT AND EQUIPMENT, AT COST
Land and improvements 2,572 1,560
Buildings 10,985 8,438
Equipment 20,324 16,943
Furniture and fixtures 2,381 2,101
Leasehold improvements 600 600
36,862 29,642
Less accumulated depreciation 17,714 15,020
Total property, plant and equipment 19,148 14,622
OTHER ASSETS 10,615 8,735
TOTAL ASSETS $179,952 $169,682
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,
1995 1994
CURRENT LIABILITIES
Outstanding checks, net $ 8,120 $ 4,257
Notes payable to banks 50,838 25,780
Current portion of long-term debt 81 -
Accounts payable, trade 10,117 20,763
Other current liabilities 4,433 4,246
Total current liabilities 73,589 55,046
LONG-TERM DEBT, LESS CURRENT PORTION 555 -
NONCURRENT LIABILITIES 985 653
STOCKHOLDERS' EQUITY
Common stock, $.10 par value,
shares issued and outstanding -
23,784 in 1995 and 26,282 in 1994 2,378 2,628
Additional paid-in capital 9,543 10,391
Retained earnings 92,902 100,964
Total stockholders' equity 104,823 113,983
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $179,952 $169,682
The accompanying notes are an integral part of the financial statements.
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TBC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Years ended December 31,
1995 1994 1993
NET SALES* $536,122 $551,920 $568,700
COSTS AND EXPENSES
Cost of sales 488,717 500,085 514,174
Distribution 8,040 8,010 8,825
Selling and administrative 14,073 14,158 11,991
Other (income) expense - net 520 (1,764) (915)
Total costs and expenses 511,350 520,489 534,075
INCOME BEFORE INCOME TAXES 24,772 31,431 34,625
PROVISION FOR INCOME TAXES 9,523 11,885 13,250
NET INCOME $ 15,249 $ 19,546 $ 21,375
Earnings per share $ .62 $ .71 $ .74
Weighted average number of shares
and equivalents outstanding 24,683 27,683 28,945
* Including sales to related parties of $130,215, $135,786 and $140,343 in
the years ended December 31, 1995, 1994 and 1993, respectively.
The accompanying notes are an integral part of the financial statements.
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TBC CORPORATION
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY
(In thousands)
Years ended December 31, 1993, 1994 and 1995
Common Stock Additional
Number of Paid-In Retained
Shares Amount Capital Earnings Total
BALANCE, JANUARY 1, 1993 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
Net income for year 15,249 15,249
Issuance of common stock
under stock option and
incentive plans, net 19 2 132 - 134
Repurchase and retirement
of common stock (2,517) (252) (1,002) (23,311) (24,565)
Tax benefit from exercise of
stock options - - 22 - 22
BALANCE, DECEMBER 31, 1995 23,784 $2,378 $ 9,543 $ 92,902 $104,823
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,
1995 1994 1993
Operating Activities:
Net income $ 15,249 $ 19,546 $ 21,375
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 4,612 4,012 3,838
Amortization 23 86 105
Deferred federal income taxes (461) 238 839
Changes in operating assets
and liabilities:
Receivables 6,179 (6,270) 1,981
Inventories (9,784) 3,559 4,768
Other current assets 230 (601) (240)
Other assets (280) (375) -
Outstanding checks, net 3,863 3,276 981
Accounts payable, trade (10,646) 2,281 (13,674)
Federal and state income taxes
refundable or payable (67) (426) (771)
Other current liabilities 187 (312) (2,694)
Noncurrent liabilities 332 653 -
Net cash provided by operating activities 9,437 25,667 16,508
Investing Activities:
Purchase of property, plant and equipment (9,151) (3,580) (3,078)
Investments in joint ventures (1,562) - -
Other 13 378 29
Net cash used in investing activities (10,700) (3,202) (3,049)
Financing Activities:
Net bank borrowings (repayments) under
short-term borrowing arrangements 25,058 (311) (7,523)
Net increase in long-term debt 636 - -
Issuance of common stock under stock option
and incentive plans, net of repurchase 134 133 718
Repurchase and retirement of common stock (24,565) (22,287) (8,525)
Net cash provided by (used in)
financing activities 1,263 (22,465) (15,330)
Decrease in cash and cash equivalents - - (1,871)
Cash and cash equivalents:
Balance - Beginning of year - - 1,871
Balance - End of year $ - $ - $ -
Supplemental Disclosures of Cash Flow Information:
Cash paid for - Interest $ 2,956 $ 1,324 $ 1,844
- Income Taxes 10,051 12,073 13,182
Supplemental Disclosure of Non-Cash Financing
Activity:
Tax benefit from exercise of stock options $ 22 $ 41 $ 22
The accompanying notes are an integral part of the financial statements.
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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.
Accounting estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, as well as certain financial statement
disclosures.
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 $6,863,000
and $5,746,000 at December 31, 1995 and 1994, respectively.
Revenue recognition - Sales are recognized upon shipment of products.
Estimated costs of returns and allowances 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 1.59%
of net sales in 1995, 1.44% in 1994 and 1.45% in 1993.
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.
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)
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.
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. 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.
Recently-issued pronouncements - Statement of Financial Accounting
Standards No. 121, "Accounting for Impairment of Long-Lived Assets and for
Long-Lived Assets To Be Disposed Of", was issued in March 1995. Adoption of
this statement, which established accounting standards for long-lived assets
and certain intangible assets beginning in 1996, is not expected to have a
material impact on the Company's consolidated financial statements.
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation", was issued in October 1995. This statement
encourages companies to recognize stock-based compensation using new fair value
accounting rules and requires companies not adopting such rules to make certain
financial disclosures, beginning in 1996. The company does not expect to change
its expense recognition policies as a result of this pronouncement but plans to
adopt the required disclosure provisions.
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, 1995.
Sales to distributors represented on the Board, including affiliates of such
distributors, accounted for approximately 24% of the Company's net sales
during 1995 and 25% in 1994 and 1993. One distributor accounted for
approximately 15% of net sales in 1995 and 16% in 1994 and 1993. Sales to
joint ventures in which the Company has an ownership interest accounted for
approximately 1% of the Company's 1995 net sales. Accounts receivable
resulting from transactions with related parties are presented separately in
the balance sheets.
3. SHORT-TERM FINANCING AGREEMENTS
The Company has lines of credit for short-term borrowings totaling
$53,000,000, 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, 1995 was
$22,162,000. The weighted average interest rate on short-term borrowings at
December 31, 1995 and 1994 was 6.80% and 7.23%, respectively.
-20-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
4. OTHER ASSETS
Other assets consist of the following (in thousands):
December 31,
1995 1994
Notes receivable $ 7,961 $7,900
Investments in joint ventures 1,562 -
Intangible assets, net of amortization 1,058 835
Other 34 -
$10,615 $8,735
The notes receivable totals include a note for $4,897,000 from a
former distributor. The maker of the note was discharged in a proceeding
under Chapter 11 of the Bankruptcy Code in 1991. The Company received
distributions totaling $308,000 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 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.
5. INCOME TAXES
Income taxes provided for the years ended December 31, 1995, 1994 and
1993 were as follows (in thousands):
1995 1994 1993
Current:
Federal $ 8,868 $10,349 $11,095
State 1,116 1,298 1,316
9,984 11,647 12,411
Deferred - Federal (461) 238 839
$ 9,523 $11,885 $13,250
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 Company'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
-21-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. INCOME TAXES (Continued)
their reported amounts in the financial statements. The net deferred income
tax assets in the financial statements at December 31, 1995, 1994 and 1993
included approximately $2,762,000, $2,474,000 and $2,740,000, respectively,
related to the allowance for doubtful accounts and notes.
The difference between the Company's effective income tax rate and the
statutory U. S. Federal income tax rate is reconciled as follows:
1995 1994 1993
Statutory U.S. Federal rate 35.0% 35.0% 35.0%
State income taxes 2.9 2.7 2.5
Other .5 .1 .8
Effective tax rate 38.4% 37.8% 38.3%
6. RETIREMENT PLANS
The Company has a defined benefit pension plan covering the majority
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,
1995 1994
Actuarial present value of accumulated
benefit obligations, including
vested benefits of $2,850 in 1995
and $2,863 in 1994 $(3,325) $(3,202)
Actuarial present value of projected
benefit obligations for service
rendered to date $(5,053) $(4,553)
Plan assets at fair value, primarily
listed stocks and U.S. bonds 5,695 5,247
Plan assets over projected
benefit obligation 642 694
Unrecognized net loss from experience
different from that assumed 1,357 1,485
Unrecognized net assets at January 1,
1995 and 1994, being recognized
over 15.53 years (91) (108)
Unrecognized prior service cost 133 170
Prepaid pension cost $ 2,041 $ 2,241
-22-<PAGE>
0
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
6. RETIREMENT PLANS (Continued)
The net expense for the defined benefit pension plan for 1995,
1994 and 1993 included the following (in thousands):
1995 1994 1993
Service cost $ 274 $ 319 $ 289
Interest cost 349 375 356
Return on plan assets (757) (2) (862)
Net amortization and deferral 616 (633) 291
$ 482 $ 59 $ 74
The weighted average discount rate and rate of increase in future
compensation levels used in determining the 1995 actuarial present value of
the projected benefit obligation were 7.25% 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.
Expenses in 1995 included supplemental retirement charges of $199,000. At
December 31, 1995, the projected benefit obligation was $1,048,000 and the
accumulated benefit obligation, which was reflected as a noncurrent
liability, totaled $985,000.
In 1994, the Company adopted an employee savings plan under Section
401(k) of the Internal Revenue Code, covering the majority of its employees.
Contributions made by the Company to the 401(k) plan are based on a specified
percentage of employee contributions. Expenses recorded in 1995 and 1994 for
the Company's contributions totaled $62,000 and $39,000, respectively.
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, 1995 or
1994.
-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, 1994, the Company had options for 438,540 shares
outstanding, with exercise prices equal to market value on the date of grant,
ranging from $1.48 to $12.13 per share. Options for 119,325 shares were
granted in 1995, with an exercise price equal to market value of $9.69 per
share. Options for 37,918 shares were exercised in 1995 at prices ranging from
$1.48 to $8.00 per share, and options for 6,604 shares were forfeited. At
December 31, 1995, options for 513,343 shares were outstanding with exercise
prices ranging from $1.48 to $12.13 per share. Stock appreciation rights for
options on 38,280 and 63,280 shares were outstanding at December 31, 1995 and
1994, respectively. Amounts included in the statements of income relating to
stock appreciation rights included a charge of $23,000 in 1995 and credits of
$198,000 in 1994 and $162,000 in 1993.
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 1995 and 1994, shares of the Company's common stock were
repurchased and retired under plans approved by the Board of Directors. The
latest plans, approved in 1995, authorized the repurchase of 2,500,000 shares
in market and other transactions. As of December 31, 1995, approximately
1,285,000 shares had been repurchased under these plans.
-24-<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
8. LEASES
Rental expense of $2,069,000, $2,160,000 and $2,149,000 was charged to
operations in 1995, 1994 and 1993, respectively. Minimum noncancelable real
property lease commitments at December 31, 1995, were as follows (in
thousands):
Year Amount
1996 2,004
1997 2,144
1998 1,179
1999 1,179
2000 1,180
Thereafter through 2005 4,914
$12,600
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 1995 and 1994 are summarized as follows:
(In thousands, except per share amounts)
First Second Third Fourth
Quarter Quarter Quarter Quarter
1995
Net sales $130,343 $132,223 $147,171 $126,385
Cost of sales 118,432 120,270 135,253 114,762
Net income 4,276 4,035 3,870 3,068
Earnings per share $ .17 $ .16 $ .16 $ .13
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
* 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 25, 1996, 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 25, 1996, 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 25, 1996, 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 25, 1996, 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, 1995, and 1994
Consolidated Statements of Income - Years ended December 31,
1995, 1994, and 1993
Consolidated Statements of Stockholders' Equity - Years ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows - Years ended December 31,
1995, 1994, and 1993
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, 1995.
-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 2nd day of February, 1996.
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 2, 1996
Louis S. DiPasqua Executive Officer
and Director
/s/ RONALD E. McCOLLOUGH Senior Vice President February 2, 1996
Ronald E. McCollough Operations (principal
accounting and
financial officer)
* MARVIN E. BRUCE Chairman of the Board February 2, 1996
Marvin E. Bruce of Directors
Director February , 1996
Robert E. Carroll, Jr.
Director February , 1996
Robert H. Dunlap
-28-<PAGE>
* STANLEY A. FREEDMAN Director February 2, 1996
Stanley A. Freedman
Director February , 1996
Dwain W. Higginbotham
* RICHARD A. McSTAY Director February 2, 1996
Richard A. McStay
* ROBERT M. O'HARA Director February 2, 1996
Robert M. O'Hara
* ROBERT R. SCHOEBERL Director February 2, 1996
Robert R. Schoeberl
* NICHOLAS F. TAUBMAN Director February 2, 1996
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 26, 1996
-30-<PAGE>
TBC CORPORATION
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(In thousands)
Additions
Charged Charged
to Costs to
Balance and Other Balance
January 1, Expenses Accounts Deductions December 31,
1995
Warranty
reserve...... $ 975 $1,591 - $1,564 (1) $1,002
Allowance for
doubtful
accounts..... 7,069 1,546 123 724 (2) 8,014
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
(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, 1994 ..... *
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 Modification and Extension Agreement, dated
June 30, 1995 between TBC Corporation and First
Tennessee Bank National Association, regarding
the $15,000,000 line of credit ...................... 38
4.3 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 .................................. *
-32-<PAGE>
4.4 Second Modification and Extension Agreement, dated
June 30, 1995 between TBC Corporation and First
Tennessee Bank National Association, regarding the
$44,500,000 line of credit ......................... 40
4.5 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 .. *
# Other long-term debt instruments ................... #
(10) MATERIAL CONTRACTS:
Management Contracts and Compensatory Plans
or Arrangements
10.1 Executive Employment Agreement between the Company
and Mr. Louis S. DiPasqua, amended and restated
as of January 31, 1995, was filed as Exhibit 10.1
to the TBC Corporation Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995 ..... *
10.2 Executive Consulting Agreement between the Company
and Mr. Marvin E. Bruce dated January 1, 1995, was
filed as Exhibit 10.2 to the TBC Corporation
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995 ............................... *
10.3 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 .. *
10.4 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 ................... *
10.5 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 ............... *
10.6 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 ....................... *
-33-<PAGE>
10.7 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 .................................. *
10.8 Agreement to Extend Executive Employment Agreement,
between the Company and Mr. Kenneth P. Dick dated
October 31, 1994 ................................... *
10.9 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 .................................. *
10.10 Agreement to Extend Executive Employment Agreement,
between the Company and Mr. Bob M. Hubbard dated
October 31, 1994 ................................... *
10.11 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 .................................. *
10.12 Agreement to Extend Executive Employment Agreement,
between the Company and Mr. Ronald E. McCollough
dated October 31, 1994 ............................. *
10.13 TBC Corporation 1995 Management Incentive
Compensation Plan, effective for the calendar year
1995 and thereafter, was filed as Exhibit 10.1 to
the TBC Corporation Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 ................ *
10.14 Amendment dated July 20, 1995 to the
TBC Corporation 1995 Management Incentive
Compensation Plan .................................. 42
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 .. *
-34-<PAGE>
Other Material Contracts
10.16 1994 Amendment to the TBC Corporation Executive
Supplemental Retirement Plan, dated
November 30, 1994, was filed as Exhibit 10.16 to
the TBC Corporation Annual Report on Form 10-K
for the year ended December 31, 1994................ *
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) ...... *
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 ................ *
-35-<PAGE>
(21) SUBSIDIARIES OF THE COMPANY:
21.1 List of the names and jurisdictions of
incorporation of the subsidiaries of the Company ... 43
(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 reports dated January 26, 1996
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
(27) FINANCIAL DATA SCHEDULE:
27.1 Financial Data Schedule ............................ +
(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.
"#" The total amount of securities authorized under
other long-term debt instruments does not exceed
10% of the total assets of the company and its
subsidiaries on a consolidated basis. A copy of
each such instrument will be furnished to the
commission upon request.
"+" Included only in the Company's electronic filing
with the Commission.
-36-<PAGE>
TBC CORPORATION
EXHIBITS
TO
FORM 10-K
FOR THE YEAR ENDED
DECEMBER 31, 1995
-37-<PAGE>
EXHIBIT 4.2
MODIFICATION AND EXTENSION AGREEMENT
THIS AGREEMENT, made and entered into as of the 30th day of June, 1995
by and between FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking
association having its principal place of business in Memphis, Tennessee
(hereinafter referred to as the "Bank"), and TBC CORPORATION, a Delaware
corporation (hereinafter referred to as the "Borrower").
WITNESSETH:
WHEREAS, Bank has extended to the Borrower a committed line of credit
in the maximum principal amount not to exceed the sum of Fifteen Million
Dollars ($15,000,000.00)(the "Loan") advances pursuant to which are evidenced
by a promissory note (the "Note"), dated June 30, 1993, in the principal amount
of Fifteen Million Dollars ($15,000,000.00), executed by the Borrower and
payable to the order of the Bank; and
WHEREAS, the Note provided for principal to be payable on
demand, and if no demand made, on June 30, 1994; and
WHEREAS, the Bank has extended the maturity of the Note to
June 30, 1995, pursuant to that certain Modification and Extension Agreement,
dated as of the 30th day of June, 1994; and
WHEREAS, the Borrower and the Bank now desire to enter into
this Agreement in order to extend the maturity of the indebtedness evidenced
by the Note.
NOW, THEREFORE, for good and valuable considerations, the
receipt and sufficiency of which are hereby acknowledged, it is agreed by the
parties as follows:
Agreements
1. At the request of the Borrower, the Bank, as the legal
holder of the indebtedness evidenced by the Note, does hereby modify the
payment of indebtedness, so that said indebtedness, together with interest
from date at the variable rate per annum as set forth in the Note, shall be
due and payable on demand, and if no demand is made, on June 30, 1996.
2. It is expressly understood and agreed that the Note shall
continue as evidence of the indebtedness until the same is paid.
As modified, amended, and extended hereby,
-38-<PAGE>
the Note evidencing the indebtedness above-mentioned is hereby ratified,
approved and confirmed in all respects.
IN WITNESS WHEREOF, the Borrower has executed this
Modification and Extension Agreement and the Bank has caused this Agreement
to be executed by its duly authorized officer, on this the day and year first
above written.
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ James G. Moore, Jr.
Title: Vice President
TBC CORPORATION
By: /s/ Louis S. DiPasqua
Title: President/CEO
By: /s/ Charles B. Quinn, Jr.
Title: Vice President/Treasurer
-39-<PAGE>
EXHIBIT 4.4
SECOND MODIFICATION AND EXTENSION AGREEMENT
THIS SECOND MODIFICATION AND EXTENSION AGREEMENT ("Second
Modification"), made and entered into as of the 30th day of June, 1995 by and
between FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking
association having its principal place of business in Memphis, Tennessee
(hereinafter referred to as the "Bank"), and TBC CORPORATION, a Delaware
corporation (hereinafter referred to as the "Borrower").
WITNESSETH:
WHEREAS, Bank has extended to the Borrower an offering line
of credit in the maximum principal amount not to exceed the sum of Forty-Four
Million Five Hundred Thousand Dollars ($44,500,000.00) (the "Loan") advances
pursuant to which are evidenced by a promissory note (the "Note"), dated June
30, 1993, in the principal amount of Forty-Four Million Five Hundred Thousand
Dollars ($44,500,000.00), executed by the Borrower and payable to the order
of the Bank; and
WHEREAS, the Note originally provided for principal to be payable on
demand, and, if no demand made, on June 30, 1994; and
WHEREAS, the provision for making payment of principal by June 30, 1994
if no demand had been made previously was modified to provide that outstanding
principal would be payable on June 30, 1995 if no demand had been made
previously (the "First Modification"); and
WHEREAS, the Borrower and the Bank now desire to enter into this Second
Modification in order to reduce the maximum principal amount of the Loan (a) to
Forty-Three Million Dollars ($43,000,000.00) during the period from the date
the Bank notifies the Borrower that the Bank has received all of the required
documentation for an offering line of credit to TBC de Mexico, S.A. de C.C.V.
(the "TBC de Mexico Notice") through September 30, 1995, and (b) to Thirty-Eight
Million Dollars ($38,000,000.00) as of October 1, 1995; and
WHEREAS, the Borrower and the Bank further desire to modify the Note
to provide that outstanding principal will be payable on June 30, 1996 if no
demand has been made previously.
NOW, THEREFORE, for good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, it is agreed by the parties as
follows:
-40-<PAGE>
Agreements
1. At the mutual agreement of the Borrower and the Bank, as the legal
holder of the indebtedness evidenced by the Note, the maximum principal amount
which may be borrowed on the Loan (a) from the date of the TBC de Mexico Notice
through September 30, 1995 is Forty-Three Million Dollars ($43,000,000.00) and
(b) beginning October 1, 1995, is Thirty-Eight Million dollars ($38,000,000.00).
2. At the request of the Borrower, the Bank, as the legal holder of the
indebtedness evidenced by the Note, does hereby modify the payment of the
indebtedness, so that said indebtedness, together with interest from date at
the variable rate per annum as set forth in the Note, shall be due and payable
on demand, and if no demand is made, on June 30, 1996.
3. It is expressly understood and agreed that the Note, as modified by
the First Modification and this Second Modification, shall continue as evidence
of the indebtedness until the same is paid. As modified, amended, and extended
by the First Modification and hereby, the Note evidencing the indebtedness
above-mentioned is hereby ratified, approved and confirmed in all respects.
IN WITNESS WHEREOF, the Borrower has executed this Second
Modification and Extension Agreement and the Bank has caused this Second
Modification and Extension Agreement to be executed by its duly authorized
officer, on this the day and year first above written.
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ James G. Moore, Jr.
Title: Vice President
TBC CORPORATION
By: /s/ Louis S. DiPasqua
Title: President/CEO
By: /s/ Charles B. Quinn, Jr.
Title: Vice President/Treasurer
-41-<PAGE>
EXHIBIT 10.14
JULY 20, 1995 AMENDMENT
TO
TBC CORPORATION
1995 MANAGEMENT INCENTIVE COMPENSATION PLAN
On July 20, 1995, the Compensation Committee of the Board of Directors
of TBC Corporation amended the TBC Corporation Management Incentive
Compensation Plan by adding the following language to the end of the first
sentence of Section 7(b) of the Plan:
"provided further, however, that there shall be no
forfeiture if the Participant ceases to be employed by
the Company prior to the end of the Restricted Period by
reason of normal retirement under a retirement plan of
the Company or the Participant otherwise retires with
the consent of the Company, or the Participant's
employment is terminated by death or disability, or if
the Company terminates his or her employment otherwise
than by reason of fault on the part of the Participant."
-42-<PAGE>
EXHIBIT 21.1
SUBSIDIARIES
OF
TBC CORPORATION
TBC Corporation has four 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
Northern States Tire, 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 reports dated January 26, 1996, on our audits of the consolidated
financial statements and financial statement schedule of TBC Corporation as
of December 31, 1995 and 1994 and for the years ended December 31, 1995, 1994
and 1993, which reports are included in this Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Memphis, Tennessee
January 26, 1996
-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, 1995;
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, 1995 (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, 1996.
/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, 1995;
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, 1995 (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, 1996.
/s/ Stanley A. Freedman
Stanley A. Freedman
-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, 1995;
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, 1995 (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
2nd day of February, 1996.
/s/ Richard A. McStay
Richard A. McStay
-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, 1995;
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, 1995 (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, 1996.
/s/ Robert M. O'Hara
Robert M. O'Hara
-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, 1995;
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, 1995 (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, 1996.
/s/ Robert R. Schoeberl
Robert R. Schoeberl
-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, 1995;
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, 1995 (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, 1996.
/s/ Nicholas F. Taubman
Nicholas F. Taubman
-50-<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-31-1995
<PERIOD-END> DEC-31-1995
<CASH> (8,120)<F1>
<SECURITIES> 0
<RECEIVABLES> 103,552
<ALLOWANCES> 8,014
<INVENTORY> 49,538
<CURRENT-ASSETS> 150,189
<PP&E> 36,862
<DEPRECIATION> 17,714
<TOTAL-ASSETS> 179,952
<CURRENT-LIABILITIES> 73,589
<BONDS> 0
0
0
<COMMON> 2,378
<OTHER-SE> 102,445
<TOTAL-LIABILITY-AND-EQUITY> 179,952
<SALES> 536,122
<TOTAL-REVENUES> 536,122
<CGS> 488,717
<TOTAL-COSTS> 488,717
<OTHER-EXPENSES> 22,633
<LOSS-PROVISION> 1,546
<INTEREST-EXPENSE> 0<F2>
<INCOME-PRETAX> 24,772
<INCOME-TAX> 9,523
<INCOME-CONTINUING> 15,249
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,249
<EPS-PRIMARY> .62
<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 CORPORATIONS'S FORM 10-K.
</FN>
</TABLE>
