Dealer Tire Financial LLC

Overview Key strengths Key risks Dominant market share in the niche tire distribution to car dealerships channel; tightly integrated with original equipment manufacturers (OEMs) and dealers. Limited scale and scope of operations in the generally stable tire replacement industry. Consistent free cash flow generation and adequate liquidity. Financial ratios will likely remain elevated due to financial-sponsor ownership and debt-funded acquisition strategy. Operating performance has benefitted from steady volumes in its core tire distribution business as the company has grown share with franchise dealerships and expanded its service offerings. EBITDA margins in 2023 were lower than the prior year due to rising wage inflation at its more labor-intensive Dent Wizard business, a somewhat weaker pricing environment for tires, and minor inflationary

...Dealer Tire Financial LLC's financial performance has remained stable over the past several quarters. Operating performance has benefitted from steady volumes in its core tire distribution business as the company has grown share with franchise dealerships and expanded its service offerings. EBITDA margins in 2023 were lower than the prior year due to rising wage inflation at its more labor-intensive Dent Wizard business, a somewhat weaker pricing environment for tires, and minor inflationary pressures on distribution centers that increased selling, general ,and administrative (SG&A) costs. However, its results were in line with our...

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