MUSCATINE, Iowa — Tire-retread company Bandag had consolidated net earnings of US$2.3 million for the first quarter ended Mar. 31, down 77 per cent from $10 million a year earlier.

Net earnings per share were 11 cents a diluted share, compared to 48 cents a diluted share a year earlier.

Consolidated net sales for the quarter were $209.2 million, a decline of 6.7 per cent compared to sales of $224.3 million in the same quarter of 2000.

“As expected, the first three months of 2001 were challenging,” says company president and chief executive officer Martin G. Carver.

“The decrease in traditional business tread volume reflects the sluggish business conditions and more intense competition throughout the truck tire industry worldwide,” he explains.

“The slowing economies in our major markets reduced demand for trucking services and, in turn, fleets looked to their suppliers for price reductions in order to reduce costs. Both new and retread tires have been affected,” Carver said.

He added these market conditions were also evident in the results of its Tire Distribution Systems tire distribution subsidiary, which experienced a 7 per cent decline in revenues from first quarter 2000.

Carver noted the impact of high-energy prices.

“In addition to the impact on the global economy in general, rising energy and raw material prices have put the tire industry in a squeeze. As diesel fuel for trucks became more costly, fleets became more adamant in lowering their operating costs, including replacement tires. Yet those same rising energy prices increased the costs of our oil-derived raw materials for tread rubber and pushed our production cost higher.”