FinishMaster Announces Second Quarter Financial Results and an Acquisition
INDIANAPOLIS--July 31, 2002--FinishMaster, Inc. , the leading national independent distributor of automotive paints and related accessories, reported today that net income for the second quarter ended June 30, 2002 was $3,664,000, or $0.47 per share, compared to net income of $1,982,000, or $0.26 per share, in the prior year period. On an SFAS No. 142 comparable basis, adjusted net income in the prior year period was $2,674,000, or $0.35 per share.FinishMaster also announced the acquisition of Color Masters Auto Color, effective August 5, 2002. Color Masters, located in Louisville, Kentucky and Lafayette, Indiana, strengthens the Company's existing presence in these growing markets.
Operating income for the quarter increased by $2,181,000 compared to the prior year period as a result of higher net sales, slightly higher gross margins and lower operating and amortization expenses. Lower amortization expense of $1,152,000 was due primarily to the adoption of SFAS No. 142, which eliminates the amortization of goodwill and intangible assets with indefinite useful lives.
For the six months ended June 30, 2002, net income was $6,788,000, or $0.87 per share, compared to net income of $2,821,000, or $0.37 per share, in the prior year period. Excluding the prior year extraordinary loss on the early extinguishment of debt, and on an SFAS No. 142 comparable basis, adjusted net income in the prior year period was $4,689,000, or $0.62 per share.
Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." The Company completed the required initial impairment review under the Standard and concluded that the calculated fair value of the Company, including goodwill and indefinite lived assets, was in excess of its carrying value. Thus, no goodwill impairment charge was necessary.
"I am pleased with the continuing progress of the Company," stated J.A. Lacy, President and Chief Operating Officer. "Higher net sales; stable gross margins; lower operating and SG&A expenses as a percentage of net sales; continuing acquisitions; and reduced debt levels have all contributed to our improved financial performance. We will continue to remain focused on customer service and the value drivers that increase long-term shareholder value."
Selected Historical Financial Data
(000's omitted, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2002 2001 2002 2001
-------- -------- -------- --------
Net sales $ 87,690 $ 85,898 $171,821 $168,794
Gross margin 32,239 31,317 63,520 61,331
Gross margin % 36.8% 36.5% 37.0% 36.3%
Operating, selling,
general & administrative
expenses 23,903 24,010 47,795 47,881
Amortization of
intangible assets 244 1,396 489 2,744
Total expenses 24,147 25,406 48,284 50,625
Income from operations 8,092 5,911 15,236 10,706
Interest expense 1,875 1,975 3,712 4,283
Income tax expense 2,553 1,954 4,736 3,107
Net income before
extraordinary loss 3,664 1,982 6,788 3,316
Extraordinary loss on early
extinguishment of debt,
net of income taxes -- -- -- 495
Net income $ 3,664 $ 1,982 $ 6,788 $ 2,821
Diluted earnings
per share before
extraordinary loss $ 0.47 $ 0.26 $ 0.87 $ 0.44
Diluted earnings
per share $ 0.47 $ 0.26 $ 0.87 $ 0.37
Diluted weighted average
shares outstanding 7,906 7,651 7,834 7,588
EBITDA $ 9,296 $ 8,300 $ 17,666 $ 15,624
June 30, December 31,
2002 2001
-------- --------
Cash $ 4,807 $ 2,977
Accounts receivable, net 30,833 28,401
Inventory 43,640 50,096
Intangible assets, net 101,812 102,273
Property, equipment & all other assets 14,720 18,289
Total assets $195,812 $202,036
Accounts payable $ 27,844 $ 37,383
Current & long-term debt 81,932 85,475
Accrued expenses & all other liabilities 16,004 16,643
Shareholders' equity 70,032 62,535
Total liabilities & shareholders' equity $195,812 $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/.