FinishMaster Net Income Increases 87% Over Prior Year
INDIANAPOLIS--Aug. 6, 2001--FinishMaster, Inc. , the leading national independent distributor of automotive paints and related accessories, reported today that net income for the quarter ended June 30, 2001 increased 87% to $1,982,000 on net sales of $86,241,000, compared to net income of $1,061,000 on net sales of $87,343,000 in the prior year. Earnings per share increased 86% to $0.26 from $0.14 in the prior year.Higher gross margins, lower overall expense levels and reduced interest expense were the primary contributors to the improved financial performance for the second quarter. Gross margins as a percentage of net sales were 36.7% versus 35.9% in the prior year. This improvement was primarily the result of large inventory purchases made prior to manufacturers' price increases. Lower overall debt levels were the major contributor to the decrease in interest expense.
"Based upon discussions with customers and vendors, management believes that sales in the automotive paint aftermarket in the United States are down in excess of 2% for the first half of this year," said Wes Dearbaugh, President and Chief Operating Officer. "Several factors that have contributed to this softening in demand include slower overall economic conditions, continued productivity improvements in the use of automotive paint, and flat to declining number of automobiles being repaired." The soft automotive paint aftermarket had an impact on the Company's net sales for the quarter which declined 1.3% compared to the prior year.
For the six months ended June 30, 2001, net income increased 44% to $2,821,000 on net sales of $169,476,000, compared to net income of $1,965,000 on net sales of $172,013,000 in the prior year. Earnings per share increased 42% to $0.37 from $0.26 in the prior year. Net income before extraordinary loss on early extinguishment of debt for the current year was $3,316,000 or $0.44 per share.
Selected Historical Financial Data
(000's omitted, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2001 2000 2001 2000
---- ---- ---- ----
Net sales $ 86,241 $ 87,343 $169,476 $172,013
Gross margin 31,660 31,359 62,013 61,292
Gross margin % 36.7% 35.9% 36.6% 35.6%
Total expenses 25,749 25,902 51,307 51,192
Income from operations 5,911 5,457 10,706 10,100
Interest expense 1,975 3,050 4,283 5,938
Income tax expense 1,954 1,346 3,107 2,197
Net income before
extraordinary loss 1,982 1,061 3,316 1,965
Extraordinary loss on
early extinguishment
of debt, net of income
taxes - - 495 -
Net income $ 1,982 $ 1,061 $ 2,821 $ 1,965
Diluted earnings per
share before
extraordinary loss $ 0.26 $ 0.14 $ 0.44 $ 0.26
Diluted earnings per
share $ 0.26 $ 0.14 $ 0.37 $ 0.26
Diluted weighted average
shares outstanding 7,651 7,544 7,588 7,558
EBITDA $ 8,301 $ 8,050 $ 15,625 $ 15,126
June 30, December 31,
2001 2000
---- ----
Cash $ 2,180 $ 1,513
Accounts receivable, net 31,638 29,063
Inventory 50,527 63,346
Intangible assets, net 104,539 102,858
Property, equipment & all other assets 17,861 21,537
Total assets $206,745 $218,317
Accounts payable $ 45,438 $ 46,470
Current & long-term debt 87,135 101,642
Accrued expenses & all other
liabilities 14,050 13,399
Shareholders' equity 60,122 56,806
Total liabilities & shareholders'
equity $206,745 $218,317
FinishMaster is the leading national independent distributor of automotive paints, coatings, and related accessories to the automotive collision repair industry. FinishMaster is headquartered in Indianapolis, Indiana and operates three major distribution centers and 159 branches in 25 of the 35 largest metropolitan areas in the country.