American Tire Distributors (ATD) has posted sales gains in the first half of this year and says it has suppliers that will fill in gaps left after Goodyear Tire & Rubber Co. and Bridgestone Americas pulled its product lines earlier this year, according to Bloomberg.
America’s largest tire distributor told lenders in a conference call last week that the company had “‘strong success’ in converting to other suppliers and has a ‘robust pipeline of new business generation,'” Bloomberg reported. It said sales for the first half of the year advanced 5% from the same period last year. Its deeply distressed bonds also rallied to their best levels for July, Bloomberg reported.
In response to questions about what new business ATD has gained, other suppliers that have stepped in to fill product gaps and how Tire Pros dealers will be affected, ATD issued the following statement:
“As you know, more than 18 months ago, ATD set out on a transformational journey to meet the evolving needs of our customers in an ever-changing industry. As part of our strategy, we are continuing to introduce new, innovative solutions to put the customers first – improving our already-unparalleled service and support, introducing advanced data analytics and digital tools, and strengthening our partnerships with manufacturers.”
ATD’s debt securities have fallen, with the bonds selling for less than a third of their face value, Bloomberg reported. The 2022 notes rose 2.75 points to 31 cents on the dollar at last Friday in New York, according to Bloomberg. Last week, Moody’s Investor Services raised a red flag of concern about the solvency of ATD in the future, urging the company to cut costs quickly to support its current business structure.
ATD’s debt securities have come under scrutiny since Goodyear and Bridgestone announced the formation of TireHub, which now serves as the main national distributor for Goodyear and Bridgestone passenger and light truck tires and their affiliated brands.
Bloomberg reported that ATD will continue to sell Bridgestone inventory through August and Goodyear products through September.
In the midst of these industry changes, ATD announced plans for continued digital innovation through 2020. The changes include a new website, analytics and delivery tracking and notifications. The company also launched a new marketing campaign for its Tire Pros dealers promising “Hassle Free. Guaranteed” service. It is anchored by a TV commercial as well as streaming radio spots, print, social and digital ads and other assets.
