FinishMaster Announces First Quarter Financial Results and One Acquisition
INDIANAPOLIS--April 30, 2002--FinishMaster, Inc. , the leading national independent distributor of automotive paints and related accessories, reported today net income for the first quarter ended March 31, 2002 was $3,124,000, or $0.40 per share, compared to net income of $839,000, or $0.11 per share in the prior year period.Excluding the prior year extraordinary loss on the early extinguishment of debt, and on a SFAS No. 142 comparable basis, earnings per share in the prior year period were $0.27.
FinishMaster also announced the acquisition of Innovative Refinish Supply, Inc., effective March 29, 2002. Innovative, located in Phoenix, Arizona, strengthens the Company's existing presence in this growing market.
Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." The Company's initial impairment review under the Standard will not be completed until June 30, 2002. Based upon currently available information, management does not anticipate a material impact on its financial position or results of operations from the initial impairment review.
Increased income from operations of $2,287,000, which resulted from higher gross margins and lower amortization expense, was the primary contributor to the improved financial performance for the quarter. Improved gross margins of $1,267,000 were attributable to higher net sales and discounts earned from normal vendor programs. Lower amortization expense of $1,041,000 was due primarily to the adoption of SFAS No. 142, which eliminates the amortization of goodwill and intangible assets with indefinite useful lives.
Even though net sales increased 1.5% for the quarter to $84,131,000 from $82,896,000 in the prior year period, "same store" sales declined 1.8%. "Our sales picture reflects the ongoing pattern of declining revenue in the paint and material aftermarket," stated Wes Dearbaugh, President and Chief Operating Officer. "We continue our efforts to increase sales and gain market share. We believe our 'same store` sales decline is less than the overall market decline."
Andre B. Lacy, Chairman and CEO added, "We are pleased with our continuing overall progress, especially the reduced non-amortization expense as a percentage of net sales and our continuing acquisition program. I am concerned with the continued weak industry demand for automotive paint and materials reflected in our 'same store` sales decline. We must turn this around or we must develop other ways to increase revenues."
Selected Historical Financial Data
(000's omitted, except per share data)
Three Months Ended
March 31,
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2002 2001
---- ----
Net sales $84,131 $82,896
Gross margin 31,281 30,014
Gross margin % 37.2% 36.2%
Operating, selling, general
& administrative expenses 23,892 23,871
Amortization of intangible assets 307 1,348
Total expenses 24,199 25,219
Income from operations 7,082 4,795
Interest expense 1,775 2,308
Income tax expense 2,183 1,153
Net income before extraordinary loss 3,124 1,334
Extraordinary loss on early
extinguishment of debt,
net of income taxes -- 495
Net income $ 3,124 $ 839
Diluted earnings per share before
extraordinary loss $ 0.40 $ 0.18
Diluted earnings per share $ 0.40 $ 0.11
Diluted weighted average shares outstanding 7,762 7,556
EBITDA $ 8,370 $ 7,324
March 31, December 31,
2002 2001
---- ----
Cash $ 2,982 $ 2,977
Accounts receivable, net 31,122 28,401
Inventory 48,868 50,096
Intangible assets, net 102,100 102,273
Property, equipment & all other assets 16,573 18,289
Total assets $201,645 $202,036
Accounts payable $ 32,478 $ 37,383
Current & long-term debt 88,197 85,475
Accrued expenses & all other liabilities 14,841 16,643
Shareholders' equity 66,129 62,535
Total liabilities & shareholders' equity $201,645 $202,036
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.
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, 2002.
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/.