FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period ________ to ________
Commission file number 1-7007
BANDAG, INCORPORATED
(Exact name of registrant as specified in its charter)
Iowa 42-0802143
(State of incorporation) (I.R.S Employer Identification No.)
2905 N HWY 61, Muscatine, Iowa 52761-5886
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: 319/262-1400
Not Applicable
(Former name, address, or fiscal year, if changed since last report)
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $1 par value; 9,085,202 shares as of April 30, 1999.
Class A Common Stock, $1 par value; 10,781,844 shares as of April 30, 1999.
Class B Common Stock, $1 par value; 2,046,043 shares as of April 30, 1999.
Page 1 of 19
<PAGE>
BANDAG, INCORPORATED AND SUBSIDIARIES
INDEX
Part I : FINANCIAL INFORMATION Page No.
Item 1 - Financial Statements (Unaudited)
Condensed Consolidated Statements of Earnings 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II : OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 15
Signatures 16
EXHIBITS :
Exhibit 27 - Financial Data Schedule (EDGAR filing only) 18
Exhibit 27.1 - Revised March 1998 Financial Data Schedule
(with EDGAR filing only) 19
Page 2
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BANDAG, INCORPORATED AND SUBSIDIARIES
PART I
FINANCIAL INFORMATION
Item l - Financial Statements:
Unaudited Condensed Consolidated Statements of Earnings
Three Months Ended
March 31,
In thousands, except per share data 1999 1998
-------- ---------
Net sales $224,138 $235,931
Other income 2,697 3,841
-------- --------
226,835 239,772
Cost of products sold 135,198 145,184
Engineering, selling,
administrative and other expenses 72,061 76,593
Interest expense 2,564 2,381
-------- --------
209,823 224,158
-------- --------
Earnings before income taxes 17,012 15,614
Income taxes 6,975 6,464
-------- --------
Net earnings $ 10,037 $ 9,150
======== ========
Net earnings per share - Basic $ .46 $ 0.40
Net earnings per share - Diluted $ .46 $ 0.40
Comprehensive net (loss) earnings $ (3,887) $ 10,645
Cash dividends per share $ 0.2850 $ 0.2750
Depreciation included in expense $ 9,648 $ 10,900
Goodwill amortization included
in expense $ 2,422 $ 2,240
Weighted average shares outstanding:
Basic 21,903 22,784
Diluted 21,990 22,908
See notes to condensed consolidated financial statements.
Page 3
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BANDAG, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
In thousands March 31, December 31,
1999 1998
-------- --------
ASSETS:
Cash and cash equivalents $ 53,766 $ 37,912
Investments 6,674 9,721
Accounts receivable - net 190,902 217,299
Inventories:
Finished products 95,395 96,889
Materials & work-in-process 21,802 14,845
-------- --------
117,197 111,734
Other current assets 59,255 62,458
-------- --------
Total current assets 427,794 439,124
Property, plant, and equipment 491,045 503,745
Less accumulated depreciation & amortization (288,721) (290,699)
-------- --------
202,324 213,046
Intangible assets 74,998 75,539
Other assets 23,312 28,020
-------- --------
Total assets $728,428 $755,729
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY:
Accounts payable $ 29,917 $ 38,286
Income taxes payable 15,222 13,704
Accrued employee compensation and benefits 24,610 27,498
Accrued marketing expenses 32,655 37,044
Other accrued expenses 46,242 46,880
Short-term notes payable and other liabilities 5,308 11,497
-------- --------
Total current liabilities 153,954 174,909
Long-term debt and other obligations 110,030 109,757
Deferred income tax liabilities 8,406 3,766
Stockholders' equity:
Common stock; $1 par value;
authorized - 21,500,000 shares;
Issued and outstanding - 9,085,201 shares
in 1999; 9,083,797 in 1998 9,085 9,084
Class A Common stock; $1 par value;
authorized - 50,000,000 shares;
Issued and outstanding - 10,781,844 shares
in 1999; 10,824,974 in 1998 10,782 10,825
Class B Common stock; $1 par value;
authorized - 8,500,000 shares;
Issued and outstanding - 2,046,043 shares
in 1999; 2,046,577 in 1998 2,046 2,047
Additional paid-in capital 7,336 7,287
Retained earnings 454,933 452,274
Equity adjustment from foreign currency
translation (28,144) (14,220)
-------- --------
Total equity 456,038 467,297
-------- --------
Total liabilities & stockholders' equity $728,428 $755,729
======== ========
See notes to condensed consolidated financial statements.
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BANDAG, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
In thousands Three Months Ended
March 31,
1999 1998
-------- --------
Operating Activities
Net earnings $ 10,037 $ 9,150
Provision for depreciation and amortization 12,070 13,140
Increase in operating assets and
liabilities-net 18,511 13,790
-------- --------
Net cash provided by operating activities 40,618 36,080
Investing Activities
Additions to property, plant and equipment (9,908) (15,699)
Purchases of investments (3,057) (15,195)
Maturities of investments 6,104 503
Payments for acquisitions of businesses (1,698) --
-------- --------
Net cash used in investing activities (8,559) (30,391)
Financing Activities
Principal payments on short-term notes payable
and other liabilities (5,840) (100,320)
Cash dividends (6,245) (6,275)
Purchases of Common Stock and
Class A Common Stock (1,196) -
-------- --------
Net cash used in financing activities (13,281) (106,595)
Effect of exchange rate changes on cash and
cash equivalents (2,924) (439)
-------- --------
Increase (decrease) in cash and cash equivalents 15,854 (101,345)
Cash and cash equivalents at beginning of year 37,912 196,400
-------- --------
Cash and cash equivalents at end of period $ 53,766 $ 95,055
======== ========
See notes to condensed consolidated financial statements.
Page 5
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BANDAG, INCORPORATED AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
The condensed consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1999 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1999. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
Comprehensive Net Earnings
Comprehensive net (loss) earnings for the three month periods ended March 31,
1999 and 1998 were as follows (in thousands):
Three Months Ended
March 31,
1999 1998
---- ----
Net earnings $ 10,037 $ 9,150
Other comprehensive income item:
Foreign currency translation (13,924) 1,495
------- ------
Comprehensive net (loss) earnings $ (3,887) $ 10,645
======= ======
Tire Distribution Systems, Inc. Acquisitions and Operating Results
During the quarter ended March 31, 1999, Tire Distribution Systems, Inc. (TDS),
a wholly owned subsidiary of Bandag, Incorporated, acquired 2 tire dealerships
for a total of $2,156,000 in cash and the forgiveness of certain liabilities.
The accounts and transactions of the acquired businesses have been included in
consolidated financial statements from the respective dates of acquisition. The
acquisitions have had an immaterial effect on the consolidated results of
operations for the three months ended March 31, 1999.
TDS results for the three month periods ended March 31, 1999 and 1998 were as
follows (in thousands):
Three Months Ended March 31,
Actual Actual Pro forma
1999 1998 1998
---- ---- ----
Net sales $ 84,613 $ 79,650 $ 89,900
Goodwill amortization 2,378 1,956 2,300
Loss before interest and income taxes (1,896) (1,058) (2,000)
Intercompany sales from Traditional
Business to TDS which have been
eliminated in consolidation $ 12,621 $ 12,359 $ 13,400
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BANDAG, INCORPORATED AND SUBSIDIARIES
Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):
For the Three Months Ended
March 31,
1999 1998
------- --------
Numerator:
Net Earnings $10,037 $ 9,150
Denominator:
Denominator for basic earnings
per share-weighted-average shares 21,903 22,784
Effect of dilutive securities:
Non-vested restricted stock 42 32
Stock options 45 92
------- -------
Dilutive potential common shares 87 124
------- -------
Denominator for diluted earnings
per share-weighted-average
shares and dilutive potential
common shares 21,990 22,908
======== =======
Net Earnings Per Share:
Basic $ .46 $ 0.40
====== ======
Diluted $ .46 $ 0.40
====== ======
Computer Software Developed For or Obtained For Internal Use
In March 1998, the AICPA issued SOP 98-1, Accounting For the Costs of Computer
Software Developed For or Obtained For Internal Use. The Company adopted this
SOP effective January 1, 1999. The SOP requires the capitalization of certain
costs incurred after the date of adoption in connection with developing or
obtaining software for internal use. Previous to this SOP the Company expensed
such costs as incurred. The adoption of this SOP did not have a material impact
on the financial position or results of operations for the three months ended
March 31, 1999.
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BANDAG, INCORPORATED AND SUBSIDIARIES
Operating Segment Information
The Company has two operating segments: the Traditional Business and TDS. The
Traditional Business manufactures precured tread rubber, equipment and supplies
for retreading tires and operates on a worldwide basis. TDS operates franchised
retreading locations and commercial, retail, and wholesale outlets throughout
the United States for the sale and maintenance of new and retread tires to
principally commercial and industrial customers.
The Company evaluates performance and allocates resources based primarily on
profit or loss before interest and income taxes. Intersegment sales and
transfers between the Traditional Business and TDS are recorded at a value
consistent with that to unaffiliated customers.
<TABLE>
<CAPTION>
In thousands
Traditional Business
-------------------------------------------------------------------------------------------
As of March 31, North America Europe Latin America Asia
-------------------- -------------------- --------------------- --------------------
1999 1998 1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales to
unaffiliated
customers $ 86,294 $ 94,995 $ 24,082 $ 24,836 $ 22,927 $ 29,698 $ 6,222 $ 6,752
Transfers between
segments 15,742 15,695 280 305 -- -- -- --
Operating earnings 14,911 15,513 3,246 2,433 4,121 4,547 895 (3,451)
Interest revenue -- -- -- -- -- -- -- --
Interest expense -- -- -- -- -- -- -- --
Corporate expenses -- -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
Earnings before
income taxes $ 14,911 $ 15,513 $ 3,246 $ 2,433 $ 4,121 $ 4,547 $ 895 $ (3,451)
<CAPTION>
TDS Corporate Consolidated
--------------------- -------------------- --------------------
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
Net sales to
unaffiliated
customers $ 84,613 $ 79,650 -- -- $ 224,138 $ 235,931
Transfers between
segments -- -- -- -- 16,022 16,000
Operating earnings (1,896) (1,058) -- -- 21,277 17,984
Interest revenue -- -- 1,524 2,442 1,524 2,442
Interest expense -- -- (2,564) (2,381) (2,564) (2,381)
Corporate expenses -- -- (3,225) (2,431) (3,225) (2,431)
--------- --------- --------- --------- --------- ---------
Earnings before
income taxes $ (1,896) $ (1,058) $ (4,265) $ (2,370) $ 17,012 $ 15,614
</TABLE>
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BANDAG, INCORPORATED AND SUBSIDIARIES
Item 2 -Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
Results include both the Company's Traditional Business and Tire Distribution
Systems, Inc. (TDS).
Consolidated net sales for the quarter ended March 31, 1999, were 5% lower than
the prior year period. Traditional Business net sales were 10% below the prior
year period. Of this 10% decrease, approximately 4 percentage points were a
result of the lower translated value of the Company's
foreign-currency-denominated sales. The remaining 6-percentage-point decrease
resulted from lower equipment sales and a 5% decline in retread material unit
volume. The Traditional Business sales decline was primarily due to intense
competitive pressures and industry consolidation in the United States, which is
expected to continue throughout 1999. The decline in Traditional Business sales
was slightly offset by a 6% increase in TDS net sales over the prior year
period. The Company's seasonal sales pattern, which is tied to trucking
activity, was similar to the quarter in previous years in that it is seasonally
the slowest for both sales and earnings. Both business segments were similarly
affected.
Gross profit margin for the Company's Traditional Business increased by 2.1
percentage points over the prior year period due to lower raw material costs in
the U.S. and Mexico. In the U.S., raw material costs decreased 8% from the prior
year period. Gross profit margins in Europe and Brazil remained steady. The
consolidated gross profit margin increased by 1.2 percentage points over the
prior year period, a lower increase than seen in the Traditional Business due to
the inclusion of the TDS operations which operate at a lower gross margin.
Consolidated operating and other expenses for the quarter ended March 31, 1999
decreased 6% from the prior year period. Despite a decline in unit volume for
the quarter ended March 31, 1999, consolidated earnings improved 10% from the
prior year period. The earnings improvement is attributable to the 13% decrease
in operating and other expenses for the Traditional Business from the prior year
period. Earnings benefited from progress in efforts to return operating expenses
to a more traditional level and the absence of a $4.4 million transaction loss
on the Indonesian rupiah that existed in the first quarter of 1998. The improved
earnings resulted in diluted earnings per share of $.46 as of March 31, 1999, up
from $.40 in the prior year period.
TRADITIONAL BUSINESS
The Company's Traditional Business operations located in the United States and
Canada are integrated and managed as one unit, which is referred to internally
as North America. Net sales in North America for the quarter ended March 31,
1999 were 8% below the prior year period due to 4%
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BANDAG, INCORPORATED AND SUBSIDIARIES
lower retread material unit volume, 2% from the decline in equipment sales, and
2% attributable to product mix. The North American sales decline was also due to
intense competitive pressures and industry consolidation in the United States,
which is expected to continue throughout 1999. Gross profit margin improved 2.8
percentage points over the prior year period because of lower average raw
material costs. As a result of the lower sales, earnings before income taxes
decreased 4% from the prior year period.
The Company's operations located in Europe principally service markets in
European countries, but also export to certain other countries in the Middle
East and Northern and Central Africa. This collection of countries is under one
management group and is referred to internally as Europe. Net sales in Europe
for the quarter ended March 31, 1999 declined 3% from the prior year period on a
retread material unit volume decrease of 9% from the prior year period. The
6-percentage point spread between the net sales decrease and the retread
material unit volume decrease is due to a higher translated value of the Belgian
franc and an 8% increase in Belgian franc denominated equipment sales. Gross
profit margin for the quarter ended March 31, 1999 decreased 1.7 percentage
points from the prior year period due to a higher level of equipment sales,
which carry a lower margin than retread materials. Operating expenses for the
quarter ended March 31, 1999 decreased 14% from the prior year period due to
lower personnel related and marketing program costs. Principally as a result of
the lower operating expenses, earnings before income taxes for the quarter ended
March 31, 1999 increased by 33% over the prior year period.
The Company's exports from North America to markets in the Caribbean, Central
America and South America, along with operations in Brazil, Mexico, Venezuela
and South Africa are combined under one management group referred to internally
as Latin America. Net sales in Latin America for the quarter ended March 31,
1999 declined 23% from the prior year period on a retread material unit volume
decrease of 4% from the prior year period. The decrease in net sales is mainly
due to the lower translated value of foreign currency, particularly the
Brazilian real. The gross profit margin for the quarter ended March 31, 1999
increased by 1.4 percentage points over the prior year period mainly due to
lower raw material costs in Mexico. Operating expenses for the quarter ended
March 31, 1999 declined 4% from the prior year period mainly due to lower
marketing program costs in South Africa and a decline in unit volume for U.S.
exports, South Africa, and Mexico. Principally because of the lower sales,
earnings before income taxes for the quarter March 31, 1999 were 9% below last
year.
The Company's exports from North America to markets in Asian countries, along
with operations in New Zealand, Indonesia and Malaysia and a licensee in
Australia are combined under one management group referred to internally as
Asia. Net sales for the quarter ended March 31, 1999 declined 8% in Asia on a 4%
increase in retread material unit volume. The spread between the decline in net
sales and the increase in retread material unit volume is due to lower exported
equipment sales, reduced new tire sales in New
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BANDAG, INCORPORATED AND SUBSIDIARIES
Zealand, and the lower translated value of foreign currencies. Lower raw
material costs in Malaysia were offset by the higher cost of imported retread
materials and lower margins on new tire sales in New Zealand to leave gross
profit margin for the quarter ended March 31, 1999 even with the prior year
period. Operating expenses declined 52% from the prior year mainly due to the
restructuring done in the prior year which reduced personnel related costs for
the quarter ended March 31, 1999. Principally because of the absence of a $4.4
million transaction loss on the Indonesian rupiah that existed in the first
quarter of 1998 and lower operating expenses, earnings before income taxes were
126% above the prior year period.
TIRE DISTRIBUTION SYSTEMS, INC.
Net sales were $84,613,000 for the period ended March 31, 1999, an increase of
6% over the prior year period. On a "same store" basis, sales declined less than
2% from the prior year period. From an operating perspective, TDS continued to
make progress in integrating the dealerships it has acquired since 1997. TDS
operating expenses were down slightly on a pro forma basis with much of the
decrease attributable to reductions in redundancies across TDS as a result of
consolidation from five dealers into three divisions. These reductions were
offset by additional operating expenses attributable to the acquisitions made in
1998 resulting in a 15% increase in operating expenses over the prior year
period. On a pro forma basis, earnings before interest and taxes remained
basically unchanged for the quarter ended March 31, 1999 despite a decline in
sales of 6% from the 1998 pro forma results.
IMPACT OF YEAR 2000
The Company operates with a combination of purchased and internally-developed
software systems. Many of the older computer systems were written using two
digits rather than four to define the applicable year. As a result, those
computer programs have time-sensitive software that recognize a date using "00"
as the year 1900 rather than the year 2000. This could cause a system failure or
miscalculations causing disruptions of operations. The Company will be required
to modify or replace software that is not Year 2000 compliant so that its
computer systems will function properly with respect to dates related to the
Year 2000.
Purchased software systems account for a significant portion of the Company's
global software environment, especially for date-sensitive applications such as
payroll and accounts receivable. The Company has performed inventories in recent
years to identify clearly non-compliant software systems and to initiate
replacement activities.
The Company has completed its assessment of the Year 2000 issue in North America
and the Company anticipates finishing its Year 2000 remediation process for
mission critical mainframe and mid-range applications by fourth quarter 1999,
although work to address cosmetic changes for non-failure date usage could
extend into first quarter 2000. Plans call for client-
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BANDAG, INCORPORATED AND SUBSIDIARIES
server technology to be compliant by third quarter 1999, communication and
network-technology to be compliant by third quarter 1999 and desktop technology
to be compliant by year-end 1999. Required changes outside of the Information
Systems area should not be significant.
The installed base for the Company's software outside of North America consists
primarily of purchased commercial software, or applications written after 1990
which were written Year 2000 compliant. The assessment process has been
completed for all locations and plans call for identified compliance issues to
be addressed mid-year 1999.
The Company is shifting new software development efforts to the client-server
platform, and has so far been able to obtain sufficient resources in this area,
but mainframe development resources remain in short supply and this will affect
development on this platform into the Year 2000. This delay has not, to this
point, significantly affected the Company's business initiatives.
The costs related to the Year 2000 issue are expected to total approximately
$14,400,000. To date, $8,100,000 of this amount has been spent and contracts and
purchase orders have been executed for an additional $2,800,000. The Company
expects approximately 50% of total costs, which are for contracted services, to
be recorded as current expense and the remaining half of the costs, which are to
replace hardware and software and upgrade existing hardware, to be capitalized.
The Company presently believes that with a combination of actions, including
modification of existing software, conversion to newer versions of purchased
software and replacement with new systems, the Year 2000 issue will not pose
significant operational problems for its computer systems. On the other hand, if
such modifications and conversions are not made or are not completed on a timely
basis, the Year 2000 issue could have a material impact on the operations of the
Company. In addition to remediation actions, the Company's contingency plans
will be reviewed and updated to address Year 2000 risks.
During 1999, the Company will continue to have formal communications with its
significant suppliers and large customers to determine the extent to which the
Company's activities would be impacted by those third parties' failure to
remediate their own Year 2000 issues. However, there can be no guarantee that
the systems of other companies on which the Company relies will be corrected on
a timely basis and therefore have no adverse effect on the Company.
The Company has assessed its own products to determine if it has exposure to
contingencies related to the Year 2000 issue and it believes any such exposure
will not be material.
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BANDAG, INCORPORATED AND SUBSIDIARIES
Financial Condition:
Operating Activities.
Net cash provided by operating activities for the quarter ended March 31, 1999,
was $4,538,000 more than the amount for the same period last year primarily due
to a decrease in accounts receivable offset by other working capital items.
Investing Activities.
The Company spent $9,908,000 on capital expenditures for the quarter ended March
31, 1999, compared to $15,699,000 spent for the same period last year. The
Company typically funds its capital expenditures from operating cash flow. The
Company spent $1,698,000 on tire dealership acquisitions in first quarter 1999.
The Company's excess funds are invested in financial instruments with various
maturities, but only instruments with an original maturity date of over 90 days
are classified as investments for balance sheet purposes. The Company's
maturities of investments exceeded purchases by $3,047,000 during the three
months, reducing total investments to approximately $6,674,000 as of March 31,
1999.
Financing Activities.
Cash dividends totaled $6,245,000 for the first quarter, compared to $6,275,000
for the same periods last year. The Company purchased 44,700 shares of its
outstanding Common and Class A Common stock, at prevailing market prices, for
$1,196,000 during the three months ended March 31, 1999. Cash dividends and
stock purchases were funded from operational cash flows.
As of March 31, 1999, the Company had $103,000,000 in funds available under
unused lines of credit.
Forward-Looking Information - Safe Harbor Statement.
In addition to historical information, this quarterly report on Form 10-Q
contains forward-looking statements regarding events and trends which may affect
the Company's future operating results and financial position. Such statements
are identified by the use of such words as "is expected to continue," "the
Company anticipates," "are expected," "the Company expects," "it believes," "the
Company presently believes," or other words of similar import. Future operations
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those reflected in the forward-looking statements.
Such uncertainties and risks include the likelihood of increased competitive
pressures and industry consolidation in the United States for the remainder of
1999,
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BANDAG, INCORPORATED AND SUBSIDIARIES
and the timely remediation of Year 2000 problems by the Company, its suppliers
and its customers.
The cost of the Year 2000 issue and the date on which the Company believes it
will complete Year 2000 modifications are based on management's best estimates
which are based on numerous assumptions of future events, including the
continued availability of certain resources, third party plans and other
factors. There can be no guarantee that these estimates will be achieved and
actual results could differ materially from those anticipated. Specific factors
that might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to purchase
Year 2000 systems, the ability to locate and correct all relevant computer
codes, the complexity of the Year 2000 Issue due to dispersed operating units
and geographic locations and similar uncertainties.
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BANDAG, INCORPORATED AND SUBSIDIARIES
PART II
OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (EDGAR filing only)
27.1 Revised March 1998 Financial Data Schedule
(EDGAR filing only)
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed on February 19, 1999. The
Current Report included unaudited condensed consolidated balance
sheets for the years ended December 31, 1998 and 1997, unaudited
condensed consolidated statements of earnings for the three and
twelve month periods ended December 31, 1998 and 1997,
respectively, and unaudited condensed consolidated statements of
cash flows for the twelve months ended December 31, 1998 and
1997.
A Current Report on Form 8-K was filed on April 21, 1999. The
Current Report included unaudited condensed consolidated balance
sheets for the quarter ended March 31, 1999 and the year ended
December 31, 1998, unaudited condensed consolidated statements
of earnings for the three month periods ended March 31, 1999 and
1998, respectively, and unaudited condensed consolidated
statements of cash flows for the three months ended March 31,
1999 and 1998.
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BANDAG, INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BANDAG, INCORPORATED
(Registrant)
Date: May 14, 1999 \S\ Martin G. Carver
-------------------------------
Martin G. Carver
Chairman and Chief Executive Officer
Date: May 14, 1999 \S\ Warren W. Heidbreder
--------------------------------------------
Warren W. Heidbreder
Vice President, Chief Financial Officer
Page 16
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BANDAG, INCORPORATED AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit
Number Exhibit Page
27 Financial Data Schedule (EDGAR filing only) 18
27.1 Revised March 1998 Financial Data Schedule
(EDGAR filing only) 19
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS AND THE UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS OF THE REGISTRANT AS OF AND FOR THE THREE
MONTHS ENDED MARCH 31, 1999, RESPECTIVELY, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS. AMOUNTS ARE IN THOUSANDS OF DOLLARS
EXCEPT PER SHARE DATA.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 53,766
<SECURITIES> 6,674
<RECEIVABLES> 207,449
<ALLOWANCES> 16,547
<INVENTORY> 117,197
<CURRENT-ASSETS> 427,794
<PP&E> 491,045
<DEPRECIATION> 288,721
<TOTAL-ASSETS> 728,428
<CURRENT-LIABILITIES> 153,954
<BONDS> 110,030
0
0
<COMMON> 21,913
<OTHER-SE> 434,125
<TOTAL-LIABILITY-AND-EQUITY> 728,428
<SALES> 224,138
<TOTAL-REVENUES> 226,835
<CGS> 135,198
<TOTAL-COSTS> 135,198
<OTHER-EXPENSES> 72,061
<LOSS-PROVISION> 470
<INTEREST-EXPENSE> 2,564
<INCOME-PRETAX> 17,012
<INCOME-TAX> 6,975
<INCOME-CONTINUING> 10,037
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,037
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS AND THE UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS OF THE REGISTRANT AS OF AND FOR THE THREE
MONTHS ENDED MARCH 31, 1998, RESPECTIVELY, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS. AMOUNTS ARE IN THOUSANDS OF DOLLARS
EXCEPT PER SHARE DATA.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 95,055
<SECURITIES> 16,627
<RECEIVABLES> 216,520
<ALLOWANCES> 12,873
<INVENTORY> 121,624
<CURRENT-ASSETS> 494,762
<PP&E> 471,028
<DEPRECIATION> 268,629
<TOTAL-ASSETS> 795,532
<CURRENT-LIABILITIES> 204,187
<BONDS> 116,268
0
0
<COMMON> 22,819
<OTHER-SE> 445,266
<TOTAL-LIABILITY-AND-EQUITY> 795,532
<SALES> 235,931
<TOTAL-REVENUES> 239,772
<CGS> 145,184
<TOTAL-COSTS> 145,184
<OTHER-EXPENSES> 76,593
<LOSS-PROVISION> 581
<INTEREST-EXPENSE> 2,381
<INCOME-PRETAX> 15,614
<INCOME-TAX> 6,464
<INCOME-CONTINUING> 9,150
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,150
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
