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Treadco improves income 401 percent.

TREADCO INC. OF FORT Smith, a wholly owned indirect subsidiary of Arkansas Best Corp., showed a 401 percent improvement in net income for the third quarter, the best of any public company in Arkansas.

"One of the major factors was the reduction of business expense," says Randall Lloyd, director of financial reporting at Treadco and Arkansas Best.

Treadco, which is traded on the NASDAQ National Market System, went public in September 1991.

It is the country's largest independent tire retreader for the trucking industry and the second largest commercial truck tire dealer.

"With the proceeds from that public offering, Treadco reduced its long-term debt, which significantly decreased the interest expense compared to last year," Lloyd says.

Treadco reported net income of $1.6 million for the third quarter, which ended Sept. 30. In third quarter 1991, Treadco had net income of $319,000.

Seventeen of Arkansas' 23 public companies reported an increase in net income compared to the same quarter last year.

Second to Treadco, P.A.M. Transportation Services Inc. of Tontitown increased net income 122 percent, with $227,000 in net income.

Third was Southwestern Energy Co. of Fayetteville, which increased its net income by 63 percent. Southwestern Energy had net income of $1.8 million.

Wal-Mart Stores Inc. of Bentonville, with $437.8 million in net income for its third quarter, showed an improvement of 30 percent over the third quarter in 1991.

Wal-Mart's net income was more than double the combined net income of the other 22 public companies and bank holding companies in the state. Wal-Mart's revenues of $13.8 billion for the quarter are more than twice the combined revenues of the other 18 public companies.

First Commercial Corp. of Little Rock led the bank holding companies with $8.6 million in net income. All four bank holding companies showed an increase in net income for the quarter.

Company History

Lloyd says Treadco's fourth quarter of 1992 will be the first quarter that compares "apples to apples" from the standpoint of interest expense.

The company was established in the late 1950s to do retreading work for Arkansas Best.

But now, Arkansas Best represents less than 3 percent of Treadco's business. Lloyd says Treadco's revenue now is split between retreading truck tires and selling truck tires.

Treadco's target business owns 10-50 trucks, such as a school district or a bottling company.

"We can provide them service as well as the knowledge about the type of tires and the tread design they need," Lloyd says.

Treadco has 22 production facilities and 17 sales outlets, scattered from Arizona to Florida and as far north as Ohio.

It is the largest domestic franchise using the Bandag process of retreading tires. Treadco is also the largest seller of truck tires for Bridgestone Tire Co. of America.

Alltel Corp. of Little Rock ranked behind Wal-Mart in net income with $57.7 million. Tyson Foods Inc. of Springdale was third with $47.5 million, followed by Little Rock-based Dillard Department Stores Inc. with $44.4 million.

Arkla Inc., with headquarters in Little Rock and Shreveport, La., had the largest net loss for the quarter, $27.6 million.

Environmental Systems Co., a hazardous waste transportation and disposal company based in Little Rock, is no longer included on the ranking of public companies since it was acquired by Brambles USA Inc., a subsidiary of the Australian company Brambles Industries Ltd.
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Title Annotation:Treadco Inc.
Author:Smith, David (American novelist)
Publication:Arkansas Business
Date:Dec 14, 1992
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