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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

OR

For the transition period from ________ to ________

Commission file number 1-7007

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  |X|   No  |_|

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes  |X|   No  |_|

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $1 par value, 9,117,667 shares as of October 31, 2004.
Class A Common Stock, $1 par value, 9,356,726 shares as of October 31, 2004.
Class B Common Stock, $1 par value; 918,591 shares as of October 31, 2004.

BANDAG, INCORPORATED AND SUBSIDIARIES

INDEX

2

PART I. FINANCIAL INFORMATION

BANDAG, INCORPORATED AND SUBSIDIARIES

Item 1. Financial Statements
Condensed Consolidated Balance Sheets

See notes to condensed consolidated financial statements.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Earnings

See notes to condensed consolidated financial statements.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

See notes to condensed consolidated financial statements.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

Note 1. Basis of Presentation

The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

Note 2. Comprehensive Net Earnings

Comprehensive net earnings for the three and nine month periods ended September 30 were as follows (in thousands):

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BANDAG, INCORPORATED AND SUBSIDIARIES

Note 3. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

Note 4. Retirement Benefit Plans

Net periodic (benefit) cost for the three and nine month periods ended September 30 is composed of the following (in thousands):

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BANDAG, INCORPORATED AND SUBSIDIARIES

Note 5. Non-Recurring Charges

During the fourth quarter of 2001, the Company recorded a non-recurring charge totaling $4,300,000 ($2,580,000 net of tax benefits) related to the closure of a North American tread rubber manufacturing facility and certain retirement benefits. Costs included $2,659,000 ($1,595,000 net of tax benefits) for termination benefits for the reduction of 46 employees, $1,521,000 ($913,000 net of tax benefits) for early retirement benefits of 19 employees, and other miscellaneous closure costs. The Company paid $93,000 and $1,321,000 in 2003 and 2002, respectively, related to the termination of employees. In the year-to-date period ended September, 30 2004, the Company paid $31,000 relating to the termination of employees. As of September 30, 2004, $1,313,000 of the charges related to the closure of the North American tread rubber manufacturing facility remained accrued. The Company estimates that substantially all of the remaining payments will be made by the end of 2004.

Note 6. Restructuring Charges

In 2002, the Company recorded restructuring charges totaling $3,500,000 ($2,450,000 net of tax benefits) for termination benefits covering 39 employees. The Company paid approximately $2,428,000 and $650,000 in 2003 and 2002, respectively, related to the termination of employees. In the year-to-date period ended September 30, 2004, the Company paid approximately $422,000 relating to the termination of employees. As of September 30, 2004, $448,000 of the charges related to the restructuring remained accrued, which reflects a $448,000 increase in the original provision due to exchange rate changes. Substantially all of the remaining payments, which are primarily severance pay, will be made by the end of 2006.

Note 7. Acquisitions

On February 13, 2004, the Company acquired an 87.5% majority interest in Speedco, Inc. from its founders and Equilon Enterprises, LLC, a Royal Dutch Shell Group company. In total, Bandag paid approximately $53,000,000 for its 87.5% interest and to assume and retire $20,100,000 of debt. The Company recorded approximately $6,500,000 of goodwill and $12,800,000 of other intangible assets. Speedco generated unaudited revenues of approximately $46,000,000 and unaudited pre-tax income of approximately $4,800,000 in 2003.

On June 10, 2004, Speedco, Inc. acquired the assets of six licensed locations, which were owned and operated by PM Express, Inc. Speedco paid approximately $15,500,000 for these assets. The Company anticipates recording approximately $5,100,000 of goodwill; however, the purchase price allocation is still being finalized pending a final asset valuation. These locations generated unaudited revenues of approximately $10,800,000 and unaudited pre-tax income of approximately $400,000 in 2003.

Speedco provides quick-service truck lubrication nationwide through its 32 company-owned on-highway locations.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Note 8. Divestitures

During the first nine months of 2004, Bandag’s Tire Distribution Systems, Inc. (TDS) segment sold 4 locations and certain other properties with a net carrying value of $2,633,000 for cash of $1,946,000 and assumed liabilities of $558,000. The assets of these locations consisted primarily of inventory and property, plant and equipment. The divestitures resulted in a gain before income taxes and minority interest of $423,000 for the quarter ended September 30, 2004 and a loss, on the same basis, of $129,000 for the year-to-date period ended September 30, 2004.

The TDS locations divested and closed during 2004 had net sales and earnings (loss) before income taxes and minority interest as follows (in thousands):

Note 9. Assets Held for Sale

TDS has fifteen locations in Texas held for sale. These locations had net sales and earnings before income taxes and minority interest as follows (in thousands):

The assets of these locations, consisting primarily of inventory and property, plant and equipment, had net carrying values of approximately $14,900,000 as of September 30, 2004 and are classified with other current assets in the Company’s Condensed Consolidated Balance Sheets. The Company anticipates that the fifteen Texas locations will be sold during the fourth quarter of 2004.

Note 10. Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation, including the $31,700,000 of tire and wheel assets classified as held for sale at December 31, 2003 and sold during the third quarter of 2004.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Note 11. Operating Segment Information

The Company has three reportable operating segments: Traditional Business, TDS and Speedco. Traditional Business manufactures precured tread rubber, equipment and supplies for retreading tires and operates on a worldwide basis. The operations of the Traditional Business segment are evaluated by worldwide geographic region. The Company’s operations located in the United States and Canada, together with Tire Management Solutions, Inc. (TMS), and Quality Design Systems, Inc. (QDS), are integrated and managed as one unit, which is referred to internally as North America. The Company’s operations located in Europe principally service those European countries, but also export to certain other countries in the Middle East and Northern and Central Africa. This collection of countries is under one management group and is referred to internally as EMEA. The Company’s exports from North America to markets in the Caribbean, Central America, South America and Asia, along with operations in Brazil, Mexico, Venezuela, South Africa, and royalties from a licensee in Australia, are combined under one management group referred to internally as International.

TDS operates franchised retreading locations and commercial, retail, and wholesale outlets primarily in the western region of the United States for the sale and maintenance of new and retread tires to principally commercial and industrial customers.

Speedco provides quick-service truck lubrication through 32 company-owned on-highway locations in the United States.

Other consists of corporate administrative expenses, net unrealized foreign exchange gains and losses on U.S. denominated investments, interest income and interest expense.

The Company evaluates performance and allocates resources based primarily on profit or loss before interest and income taxes. Intrasegment sales between the Traditional Business and TDS are recorded at a value consistent with that to unaffiliated customers.

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BANDAG, INCORPORATED AND SUBSIDIARIES

For the three months ended September 30 (in thousands):

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BANDAG, INCORPORATED AND SUBSIDIARIES

For the nine months ended September 30 (in thousands):

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BANDAG, INCORPORATED AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

GENERAL

Results include the Company’s three reportable operating segments – its Traditional Business, TDS and Speedco.

On May 3, 2004 Bandag announced that Yellow Roadway Corporation elected on April 30, 2004 not to renew the existing Bandag outsourcing agreement for Roadway Express tire and wheel services in place since 1999 and, in accordance with the terms of the agreement, would be repurchasing the tire and wheel assets from Bandag. On July 9, 2004 Bandag received an initial payment of approximately $32,243,000 and received a final payment of approximately $1,781,000 on July 29, 2004. These tire and wheel assets had net carrying values of approximately $33,700,000 and $31,700,000 as of June 30, 2004 and December 31, 2003, respectively, and were classified with other current assets in the Company’s Condensed Consolidated Balance Sheets. Bandag’s annual revenues under the contract in 2003, including revenue derived from sales of retread materials to dealers performing services under the agreement, were approximately $27,500,000. Bandag estimates that the agreement contributed approximately $4,000,000 to consolidated net earnings in 2003, or approximately $0.21 per diluted share. The foregoing discussion concerning the economic contribution attributable to the Roadway Express agreement in 2003 overstates the potential financial impact to Bandag on the termination of the agreement since it does not take into account or reflect the contribution to earnings which Bandag will recognize upon the investment of the proceeds derived from the sale of the tires and wheels to Yellow Roadway Corporation.

On February 13, 2004, the Company acquired an 87.5% majority interest in Speedco, Inc. from its founders and Equilon Enterprises, LLC, a Royal Dutch Shell Group company. In total, Bandag paid approximately $53,000,000 for its 87.5% interest and to assume and retire $20,100,000 of debt. The Company recorded approximately $6,500,000 of goodwill and $12,800,000 of other intangible assets. Speedco generated unaudited revenues of approximately $46,000,000 and unaudited pre-tax income of approximately $4,800,000 in 2003.

On June 10, 2004, Speedco, Inc. acquired the assets of six licensed locations, which were owned and operated by PM Express, Inc. Speedco paid approximately $15,500,000 for these assets. The Company anticipates recording approximately $5,100,000 of goodwill; however, the purchase price allocation is still being finalized pending a final asset valuation. These locations generated unaudited revenues of approximately $10,800,000 and unaudited pre-tax income of approximately $400,000 in 2003.

Speedco provides quick-service truck lubrication nationwide through its 32 company-owned on-highway locations.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Bandag’s TDS segment sold or closed 4 locations during the first nine months of 2004 and 44 locations during the full year of 2003. During the first nine months of 2004, Bandag’s TDS segment sold 4 locations and certain other properties with a net carrying value of $2,633,000 for cash of $1,946,000 and assumed liabilities of $558,000. The assets of these locations consisted primarily of inventory and property, plant and equipment. The divestitures resulted in a gain before income taxes and minority interest of $423,000 for the quarter ended September 30, 2004 and a loss, on the same basis, of $129,000 for the year-to-date period ended September 30, 2004.

In conjunction with the divestiture of certain TDS locations in the second and third quarters of 2003, Bandag guaranteed a portion of third-party loans to a dealer. Bandag’s exposure under these guarantees is $2,800,000. The guarantees are secured by assets of the dealer. The term of the guarantees is three years. The fair value of the guarantees, which was originally determined to be $600,000 and is currently valued at $367,000, is included in long-term debt and other obligations in the Company’s Condensed Consolidated Balance Sheet at September 30, 2004.

The TDS locations divested and closed during 2004 and 2003 had net sales and earnings (loss) before income taxes and minority interest as follows (in thousands):

TDS has fifteen locations in Texas held for sale. These locations had net sales and earnings before income taxes and minority interest as follows (in thousands):

The assets of these locations, consisting primarily of inventory and property, plant and equipment, had net carrying values of approximately $14,900,000 as of September 30, 2004 and are classified with other current assets in the Company’s Condensed Consolidated Balance Sheets. The Company anticipates that the fifteen Texas locations will be sold during the fourth quarter of 2004.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Consolidated net sales for the quarter and year-to-date periods ended September 30, 2004 increased $25,403,000 and $30,664,000, or 12% and 5%, from the prior year periods, respectively, on a 5% and 4% increase in unit volume, respectively. Net sales were positively impacted by $17,013,000 and $38,134,000 for the quarter and year-to-date periods ended September 30, 2004, respectively, due to the acquisition of Speedco on February 13, 2004. Net sales were also positively impacted by $3,339,000 and $13,683,000 for the quarter and year-to-date periods ended September 30, 2004, respectively, due to the effect of translating foreign currency denominated results to U.S. dollars. The year-to-date increase in net sales was partially offset by a decrease in TDS net sales of $37,919,000, or 20%, primarily as a result of the divestitures and closures of 44 locations in 2003 and four locations in 2004. The Company’s seasonal sales pattern is tied to the overall performance of the economy and to the level of trucking activity.

Despite higher raw material costs within the Traditional Business, consolidated gross profit margin for the quarter and year-to-date periods ended September 30, 2004 increased 0.1 percentage point and 0.3 percentage points, respectively.

Consolidated operating and other expenses increased $11,191,000 and $7,700,000, or 21% and 4%, for the quarter and year-to-date periods ended September 30, 2004, respectively, from the prior year periods. The increase in consolidated operating and other expenses was substantially impacted by expenses related to the Speedco operations of $4,430,000 and $9,973,000 for the quarter and year-to-date periods ended September 30, 2004, respectively. Other segment operating and other expenses were negatively impacted by $2,614,000 and $369,000 for the quarter and year-to-date periods ended September 30, 2004, respectively, from the prior year periods, due to net unrealized foreign exchange gains and losses on U.S. denominated investments.

Consolidated net earnings increased $129,000 and $4,956,000 for the quarter and year-to-date periods ended September 30, 2004, respectively, as compared to the prior year periods. Consolidated net earnings were $20,124,000 and $36,037,000, or $1.02 and $1.83 per diluted share, for the quarter and year-to-date periods ended September 30, 2004, respectively, compared to consolidated net earnings of $19,995,000 and $31,081,000, or $1.03 and $1.61 per diluted share, for the quarter and year-to-date periods ended September 30, 2003, respectively. Consolidated net earnings for the year-to-date period ended September 30, 2004 included a favorable tax adjustment of $1,000,000, or $0.05 per diluted share, resulting primarily from the reassessment of certain tax matters.

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BANDAG, INCORPORATED AND SUBSIDIARIES

TRADITIONAL BUSINESS

The Company’s Traditional Business operations located in the United States and Canada, together with Tire Management Solutions, Inc. and Quality Design Systems, Inc., are integrated and managed as one unit, which is referred to internally as North America. North America sells to independent dealers as well as to TDS and other subsidiaries. Sales to TDS and other subsidiaries are eliminated in consolidation. Accordingly, as TDS locations are divested and become unaffiliated Bandag customers, sales to independent dealers will benefit.

The table below depicts the breakout of North America’s retread product sales between TDS and independent dealers.

Retread product sales to independent dealers are influenced by several factors, including increased sales to independent dealers that purchased TDS locations and the positive effect of translating Canadian dollar foreign currency denominated results to U.S. dollars of $1,101,000 and $2,768,000 for the quarter and year-to-date periods ended September 30, 2004, respectively. Retread product sales for the quarter ended September 30, 2004 were negatively impacted by a decrease in volume of 1%, a portion of which is attributed to the loss of the Roadway business. Retread product sales for the year-to-date period ended September 30, 2004 was positively impacted by an increase in volume of 2%. The year-to-date decrease in retread product sales to TDS is primarily due to the divestitures and closures of TDS locations. Net sales for the quarter ended September 30, 2004, were negatively impacted by a $2,265,000 increase in sales deductions which was offset by a $1,433,000 increase in equipment sales and an adjustment of approximately $1,445,000 related to a reassessment of dealer marketing program accruals.

An increase in raw material costs primarily resulted in a 1.1 and 1.7 percentage point decrease in North America’s gross margin for the quarter and year-to-date periods ended September 30, 2004 from the prior year periods, respectively.

Operating and other expenses increased $431,000 and $2,675,000, or 2% and 3%, for the quarter and year-to-date periods ended September 30, 2004 from the prior year periods, respectively. The increase in operating and other expenses for the quarter and year-to-date periods ended September 30, 2004 is primarily due to a $1,270,000 adjustment related to a reassessment of sales tax accruals.

Lower gross profit margin and higher operating and other expenses primarily resulted in a decrease for North America of $2,203,000 and $2,140,000 in earnings before income taxes and minority interest for the quarter and year-to-date periods ended September 30, 2004, as compared to the prior year periods.

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BANDAG, INCORPORATED AND SUBSIDIARIES

The Company’s operations located in Europe principally service markets in European countries, but also export to certain other countries in the Middle East and Northern and Central Africa. This collection of countries is under one management group and is referred to internally as EMEA. Net sales in EMEA increased $3,906,000 and $7,860,000, or 22% and 14%, for the quarter and year-to-date periods ended September 30, 2004, from the prior year periods, respectively. Retread material unit volume increased 1% for the quarter ended September 30, 2004 as compared to the prior year period and was approximately even for the year-to-date period ended September 30, 2004, as compared to the prior year period. Net sales in EMEA in the quarter and year-to-date periods ended September 30, 2004 were positively impacted by $1,750,000 and $6,634,000, respectively, due to the effect of translating foreign currency denominated results to U.S. dollars. Gross margin increased 8.2 and 0.7 percentage points for the quarter and year-to-date periods ended September 30, 2004 compared to the prior year periods, respectively. Gross margin was positively impacted by price increases targeted to improve margins.

Operating and other expenses increased $2,143,000 and $3,854,000, or 38% and 21%, for the quarter and year-to-date periods ended September 30, 2004 as compared to the prior year periods, respectively. The increase in operating and other expenses for the quarter and year-to-date periods ended September 30, 2004 was primarily due to trade show expenses and higher personnel-related costs coupled with the effect of translating foreign currency denominated results to U.S. dollars.

Higher gross margin primarily resulted in earnings before income taxes and minority interest for EMEA of $307,000 for the quarter ended September 30, 2004 compared to a loss of $472,000, on the same basis, for the prior year period. EMEA’s earnings before income taxes and minority interest for the year-to-date period ended September 30, 2004 was $333,000 as compared to $1,040,000 for the prior year period.

The Company’s exports from North America to markets in the Caribbean, Central America, South America and Asia, along with operations in Brazil, Mexico, Venezuela, South Africa, and royalties from a licensee in Australia, are combined under one management group referred to internally as International. Net sales in International for the quarter and year-to-date periods ended September 30, 2004 increased $5,607,000 and $10,072,000, or 24% and 15%, from the prior year periods, respectively. Retread material unit volume increased 24% and 9% for the quarter and year-to-date periods ended September 30, 2004 from the prior year periods, respectively. Net sales in International for the quarter and year-to-date periods ended September 30, 2004 were positively impacted by $488,000 and $4,281,000, respectively, due to the effect of translating foreign currency denominated results to U.S. dollars. Gross margin for the quarter and year-to-date periods ended September 30, 2004 increased 1.2 and 0.1 percentage points from the prior year periods, respectively.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Operating and other expenses for the quarter and year-to-date periods ended September 30, 2004 increased $399,000 and $1,795,000, or 7% and 11%, from the prior year periods, respectively. Operating and other expenses for the quarter and year-to-date periods ended September 30, 2004 were negatively impacted by the effect of translating foreign currency denominated results to U.S. dollars.

Earnings before income taxes and minority interest for the quarter and year-to-date periods ended September 30, 2004 increased $1,901,000 and $1,656,000 from the prior year periods, respectively, primarily due to the increase in net sales and gross margin.

TIRE DISTRIBUTION SYSTEMS, INC.

TDS net sales for the quarter ended September 30, 2004 increased $546,000, or 1% from the prior year period. TDS net sales for the year-to-date period ended September 30, 2004 decreased $37,919,000, or 20%, from the prior year periods primarily due to the divestitures and closures of 48 TDS locations throughout 2003 and 2004.

Gross margin for the quarter and year-to-date periods ended September 30, 2004 increased 0.9 and 0.7 percentage points from the prior year periods, respectively. Operating and other expenses decreased $686,000 and $12,987,000, or 5% and 25%, for the quarter and year-to-date periods ended September 30, 2004, respectively, primarily due to the divestitures and closures. Operating and other expenses for the year-to-date period ended September 30, 2004 were negatively impacted by $129,000 due to the loss on sale of TDS locations, as compared to a loss of $784,000 in the prior year period.

TDS recorded earnings before income taxes and minority interest of $3,563,000 and $688,000 for the quarter and year-to-date periods ended September 30, 2004, respectively. TDS recorded earnings before income taxes and minority interest of $1,867,000 for the quarter ended September 30, 2003 and a loss, on the same basis, of $4,615,000 for the year-to-date period ended September 30, 2003.

See “GENERAL – Sale of TDS Locations” hereunder for a discussion of the sale of TDS locations in 2004.

SPEEDCO, INC.

Speedco, which was acquired February 13, 2004, and its six licensees which were acquired June 10, 2004, had net sales for the quarter and year-to-date periods ended September 30, 2004 of $17,013,000 and $38,134,000, respectively. Speedco recorded earnings before income taxes and minority interest of $1,979,000 and $4,636,000 for the quarter and year-to-date periods ended September 30, 2004, respectively.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Financial Condition:

Liquidity

At September 30, 2004, the Company had cash and cash equivalents of $187,724,000, as compared to $189,976,000 at December 31, 2003. The sale of tire and wheel assets discussed under “GENERAL” contributed $34,023,000 to cash and cash equivalents for the period ended September 30, 2004. The decline in cash and cash equivalents was primarily attributable to the Company’s use of cash for the acquisition of Speedco on February 13, 2004 and the acquisition of the six licensees from PM Express on June 10, 2004. The Company’s ratio of total current assets to total current liabilities was 2.9 to 1 at September 30, 2004, with current assets exceeding current liabilities by $302,111,000. At September 30, 2004, the Company had approximately $14,900,000 of assets held for sale, consisting primarily of inventory and property, plant and equipment classified as other current assets. At September 30, 2004, the Company had approximately $101,866,000 in borrowing capacity available under unused lines of credit. The Company believes it has an adequate cash balance for future cash flow needs.

Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2004 was $68,602,000, primarily due to net earnings adjusted for the noncash depreciation expense, a decrease in accounts receivable and an increase in accounts payable and other liabilities.

Investing Activities

The Company spent $25,393,000 on capital expenditures through September 30, 2004, compared to $11,319,000 spent for the same period last year. The increase in capital expenditures is primarily due to expenditures made by Speedco for new facilities and expansions of quick-service tire lanes at existing facilities. The Company typically funds its capital expenditures from operating cash flows. During the nine months ended September 30, 2004, the Company sold 4 TDS locations for cash proceeds of $1,946,000.

On February 13, 2004, the Company acquired an 87.5% majority interest in Speedco, Inc. from its founders and Equilon Enterprises, LLC, a Royal Dutch Shell Group company. In total, Bandag paid approximately $53,000,000 for its 87.5% interest and to assume and retire $20,100,000 of debt.

On June 10, 2004, Speedco, Inc. acquired the assets of six licensed locations, which were owned and operated by PM Express, Inc. Speedco paid approximately $15,500,000 for these assets.

The Company’s excess funds are invested in financial instruments with various maturities, but only instruments with an original maturity date of over 90 days are classified as investments for balance sheet purposes. The Company’s maturities of investments exceeded purchases by $10,808,000 during the nine months ended September 30, 2004, resulting in no instruments being held with a maturity date over 90 days as of September 30, 2004.

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BANDAG, INCORPORATED AND SUBSIDIARIES

Financing Activities

Cash dividends totaled $18,862,000 for the nine months ended September 30, 2004, compared to $18,435,000 for the same period last year. Cash dividends per share were $0.975 for the nine months ended September 30, 2004, compared to $0.960 per share for the same period last year.

During the nine month period ended September 30, 2004, the Company purchased 65,791 shares of Common Stock and Class A Common Stock at an average price of $37.65 per share.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

See the Company’s most recent Annual Report filed on Form 10-K (Item 7A). There has been no material change in this information.

Item 4. Controls and Procedures

Based on an evaluation performed by the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2004.

Based on an evaluation performed by the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, there were no changes in the Company’s internal control over financial reporting identified in such evaluation that occurred during the quarter ended September 30, 2004 that has materially affected, or is likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

BANDAG, INCORPORATED AND SUBSIDIARIES

Item 2 – Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

Issuer Purchases of Equity Securities(1)

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PART II. OTHER INFORMATION

BANDAG, INCORPORATED AND SUBSIDIARIES

Item 6 — Exhibits

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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Exhibit Index