FinishMaster Announces Improved Third Quarter Financial Results
INDIANAPOLIS--Nov. 5, 2001--FinishMaster, Inc. , the leading national independent distributor of automotive paints and related accessories, reported today that net income for the quarter ended September 30, 2001 increased 69% to $1,619,000 on net sales of $83,706,000, compared to net income of $957,000 on net sales of $85,600,000 in the prior year. Earnings per share increased 62% to $0.21 from $0.13 in the prior year.For the nine months ended September 30, 2001, net income increased 52% to $4,440,000 on net sales of $253,182,000, compared to net income of $2,922,000 on net sales of $257,613,000 in the prior year. Earnings per share increased 49% to $0.58 from $0.39 in the prior year. Net income before extraordinary loss on early extinguishment of debt for the current year was $4,935,000 or $0.65 per share.
Increased operating income resulting from higher gross margins and lower overall expense levels, and reduced interest expense were the primary contributors to the improved financial performance for both the third quarter and year-to-date. Gross margins benefited from large inventory purchases in late 2000 made prior to manufacturers' price increases, supplier purchasing incentive programs, and improved inventory management procedures. Lower overall debt levels were the major contributor to the decrease in interest expense.
Continued weakness in demand for automotive paints and related accessories had an impact on the Company's quarterly net sales, which declined 2.2% compared to the prior year. Several factors contributed to this softness in demand. They include continued productivity improvements in the use of automotive paint, flat to declining number of automobiles being repaired, and slower overall economic conditions. These industry dynamics are not expected to reverse in the next several quarters.
"While our operating performance reflects solid improvement, we are concerned with our declining sales," said Wes Dearbaugh, President and Chief Operating Officer. "We have already initiated actions designed to improve customer service levels and to grow sales."
Selected Historical Financial Data
(000's omitted, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2001 2000 2001 2000
---- ---- ---- ----
Net sales $ 83,706 $ 85,600 $253,182 $257,613
Gross margin 31,531 31,391 93,544 92,683
Gross margin % 37.7% 36.7% 36.9% 36.0%
Total operating expenses 25,914 26,411 77,221 77,603
Income from operations 5,617 4,980 16,323 15,080
Interest expense 2,409 2,968 6,692 8,906
Income tax expense 1,589 1,055 4,696 3,252
Net income before
extraordinary loss 1,619 957 4,935 2,922
Extraordinary loss on early
extinguishment of debt,
net of income taxes - - 495 -
Net income $1,619 $ 957 $ 4,440 $ 2,922
Diluted earnings per share
before extraordinary $ 0.21 $ 0.13 $ 0.65 $ 0.39
loss
Diluted earnings per share $ 0.21 $ 0.13 $ 0.58 $ 0.39
Diluted weighted average
shares outstanding 7,684 7,545 7,621 7,554
EBITDA $8,075 $7,705 $ 23,700 $ 22,831
September 30, December 31,
2001 2000
---- ----
Cash $ 1,404 $ 1,513
Accounts receivable, net 30,294 29,063
Inventory 44,504 63,346
Intangible assets, net 103,108 102,858
Property, equipment &
all other assets 18,612 21,537
Total assets $ 197,922 $ 218,317
Accounts payable $ 16,832 $ 46,470
Current & long-term debt 104,600 101,642
Accrued expenses &
all other liabilities 16,140 13,399
Shareholders' equity 60,350 56,806
Total liabilities &
shareholders' equity $ 197,922 $ 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 158 branches in 25 of the 35 largest metropolitan areas in the country.
This release contains forward-looking statements that are subject to various risks and uncertainties. The Company's actual results could differ from those anticipated in such forward-looking statements. Please refer to the Company's cautionary statements contained in its most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2001.
For more information on FinishMaster via the Internet, visit FinishMaster's website at http://www.finishmaster.com/ or Corporate News on the Net page at http://www.businesswire.com/companyspecific/.