FinishMaster Announces Third Quarter Financial Results
INDIANAPOLIS--Oct. 30, 2002--FinishMaster, Inc. , the leading national independent distributor of automotive paints and related accessories, reported today that net income for the third quarter ended September 30, 2002 was $3,144,000, or $0.40 per share, compared to net income of $1,619,000, or $0.21 per share, in the prior year period. On an SFAS No. 142 comparable basis, adjusted net income in the prior year period was $2,537,000, or $0.33 per share.Net income for the quarter increased by $1,525,000 compared to the prior year period as a result of higher net sales and gross margin dollars, and lower amortization expense and interest expense. The increase in net sales was due to same store sales growth and acquisitions. Same store sales growth for the quarter was 1.5%. Higher gross margin dollars were driven solely by increased sales volume. Less favorable purchasing opportunities decreased gross margins realized as a percentage of net sales. Operating, selling and G&A expenses as a percentage of net sales declined to 28.2% from 29.0% in the prior year quarter. Lower amortization expense was due primarily to the adoption of SFAS No. 142, effective January 1, 2002, which eliminates the amortization of goodwill and intangible assets with indefinite useful lives. Lower effective interest rates and average outstanding borrowings resulted in the decrease in interest expense for the quarter.
For the nine months ended September 30, 2002, net income was $9,932,000, or $1.27 per share, compared to net income of $4,440,000, or $0.58 per share, in the prior year period. On an SFAS No. 142 comparable basis, adjusted net income in the prior year period was $6,731,000, or $0.88 per share.
Net income for the nine months ended September 30, 2002 increased $5,492,000 as a result of higher net sales, a stable gross margin rate, improved operating, selling and G&A expenses as a percentage of net sales, and lower amortization and interest expenses.
Selected Historical Financial Data
(000's omitted, except per share data)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2002 2001 2002 2001
---- ---- ---- ----
Net sales $88,122 $83,434 $259,943 $252,228
Gross margin 32,063 31,259 95,583 92,590
Gross margin % 36.4% 37.5% 36.8% 36.7%
Operating, selling, general &
administrative expenses 24,881 24,218 72,676 72,099
Amortization of intangible assets 247 1,424 737 4,168
Total expenses 25,128 25,642 73,413 76,267
Income from operations 6,935 5,617 22,170 16,323
Interest expense 1,775 2,409 5,486 6,692
Income tax expense 2,016 1,589 6,752 4,696
Net income before extraordinary loss 3,144 1,619 9,932 4,935
Extraordinary loss on early
extinguishment of debt,
net of income taxes - - - 495
Net income $3,144 $1,619 $9,932 $4,440
Diluted earnings per share before
extraordinary loss $0.40 $0.21 $1.27 $0.65
Diluted earnings per share $0.40 $0.21 $1.27 $0.58
Diluted weighted average shares
outstanding 7,874 7,684 7,847 7,621
EBITDA $8,066 $8,076 $25,732 $23,700
September December
30, 2002 31,2001
-------- --------
Cash $3,070 $2,977
Accounts receivable, net 32,151 28,401
Inventory 44,179 50,096
Intangible assets, net 102,298 102,273
Property, equipment & all other assets 16,498 18,289
Total assets $198,196 $202,036
Accounts payable $26,322 $37,383
Current & long-term debt 81,866 85,475
Accrued expenses & all other liabilities 16,631 16,643
Shareholders' equity 73,377 62,535
Total liabilities & shareholders' equity $198,196 $202,036
A reconciliation of reported net income adjusted to reflect the
adoption of SFAS No. 142 is provided below:
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2002 2001 2002 2001
---- ---- ---- ----
Reported net income $3,144 $1,619 $9,932 $4,440
Add-back goodwill and indefinite lived
intangible asset amortization, net of tax - 918 - 2,291
Adjusted net income $3,144 $2,537 $9,932 $6,731
Reported diluted earnings per share $0.40 $0.21 $1.27 $0.58
Add-back goodwill and indefinite lived
intangible asset amortization, net of tax - 0.12 - 0.30
Adjusted diluted earnings per share $0.40 $0.33 $1.27 $0.88
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.
FinishMaster is headquartered in Indianapolis, Indiana and operates three major distribution centers and 161 branches in 25 of the 35 largest metropolitan areas in the country. 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/.