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FinishMaster Announces Year End Financial Results

Published on 2005-03-07. Author : SpecialChem

INDIANAPOLIS -- FinishMaster, Inc. (PINK SHEETS:FMST - News) reported net income for the year ended December 31, 2004 was $13,304,000, or $1.71 per share, compared with net income of $11,852,000, or $1.52 per share, in the prior year period. For the three months ended December 31, 2004, net income was $3,364,000, or $0.43 per share, compared to net income of $2,493,000, or $0.32 per share, in the prior year period.

The improvement in net income for the quarter and year compared to the prior year periods was a result of higher net sales and decreased interest expense. A lower effective income tax rate also contributed to the improved financial performance.

  • The increase in net sales for the quarter and year was due to positive same branch sales growth and acquisitions. The increase in same branch sales was attributable to various sales and marketing initiatives designed to increase the Company's competitiveness and market presence. All of the Company's geographical regions realized growth in same branch sales. Acquisitions, principally Automotive Refinish Technologies, also had an impact on the Company's increase in sales.
  • Higher gross margin dollars resulted from increased sales volume, partially offset by a decline in the margin rate. The 90 basis point deterioration in margin rate was a result of higher shipping and handling costs; greater share of overall sales in the lower margin rate fulfillment business; and increased discounts to meet competitive market conditions. Favorable inventory reserve adjustments positively impacted margins for the quarter and year.
  • Total expenses as a percentage of net sales decreased 40 basis points to 23.6 percent for the quarter and to 23.2 percent for the year as a result of expenses increasing at a lower rate than net sales. The increase in overall expense dollars was due to the expenses associated with the ten branch locations acquired in the prior year from Automotive Refinish Technologies; higher wages and benefits associated with the Company's initiative to increase sales personnel; increased selling related expenses associated with attracting and retaining customers; and increased bonus expense associated with the Company's improved performance.
  • Lower average outstanding borrowings and annualized effective interest rates resulted in the decrease in interest expense for the year while lower average borrowings was the primary contributor for the decrease in interest expense for the quarter.
  • A lower effective income tax rate resulted from a release of tax reserves associated with tax asset realization.

FinishMaster is the leading national independent distributor of automotive paints, coatings, and related accessories to the automotive collision repair industry. The Company is headquartered in Indianapolis, Indiana, and operates three major distribution centers and 169 branches in 27 of the 35 largest metropolitan areas in the country.

Source: FinishMaster, Inc.

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