MUSCATINE, Iowa – A drop in new truck sales and low-priced tires from offshore manufacturers have dampened North American retread sales, says Bandag chairman Martin Carver. But his company has still managed to increase its earnings.

Bandag increased its second quarter earnings by nine per cent when compared to the same period in 1999, despite a one point drop in sales.

Net earnings reached $17.6 million, up from $16.1 million. (All figures in US dollars.) Sales, however, dropped to $249.1 million, from the $252.1 million recorded in the second quarter of 1999.

Carver said significant cuts in operating costs and a price increase in April helped offset a rising cost in raw materials.

“Nevertheless, during the quarter we continued to see a significant slowing in North American retread sales,” Carver said. “We believe this trend can be attributed to two factors: First, new truck demand has dampened, which in turn encourages the movement of additional new tires into the replacement market. Second, we are seeing an influx of low-priced new tires from overseas, which are competing for wheel positions in low-margin market segments.” n