FinishMaster Announces Third Quarter Financial Results.INDIANAPOLIS -- FinishMaster, Inc. (Pink Sheets:FMST FMST Fort Minor Street Team (gaming website) FMST Field Missile System Test FMST Frequency Modulation Stereo ) today reported net income for the quarter ended September 30, 2006 of $5,192,000, or $0.66 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $4,303,000, or $0.55 per diluted share, in the prior year period. The improvement in net income for the quarter compared to the prior year period was a result of higher net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and margin rate partially offset by higher overall expense levels. * The increase in net sales for the quarter was due to positive same branch sales growth and acquisitions. This was the eleventh In music or music theory an eleventh is the note eleven scale degrees from the root of a chord and also the interval between the root and the eleventh. Since there are only seven degrees in a diatonic scale the eleventh degree is the same as the subdominant and the interval consecutive quarter the Company has experienced same branch sales growth. The primary factor contributing to this growth was supplier price increases passed through to customers. The Company experienced during the current quarter a weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. in demand for automotive paint
and accessories in certain geographic regions compared to previous
quarters. Regional factors such as weather and economic conditions were
the main factors contributing to this weakening demand.* Higher gross margin dollars resulted from increased sales volume and improved margin rate. A 60 basis point improvement in the margin rate was the result of price increases and lower inventory reserve requirements Reserve Requirements Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve Bank. . Partially offsetting these items were increased customer discounts to meet competitive market conditions. * Total expenses as a percentage of net sales decreased 10 basis points to 22.1 percent for the quarter as a result of expenses increasing at a lower rate than net sales. The increase in expense dollars was due primarily to higher health insurance and incentive compensation plan expenses. * Lower average outstanding borrowings and a lower annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. effective interest rate resulted in reduced interest expense for the quarter. For the nine months ended September 30, 2006, net income was $14,894,000, or $1.90 per diluted share, compared to net income of $11,803,000, or $1.52 per diluted share, in the prior year period. The improvement in net income for the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. period compared to the prior year period was a result of higher net sales and margin rate partially offset by higher operating and selling, general & administrative expenses and income tax expense. * The increase in net sales for the year-to-date period was due to positive same branch sales growth and acquisitions. Factors contributing to this growth in same branch sales included net customer additions and supplier price increases passed through to customers. * Higher gross margin dollars resulted from increased sales volume and improved margin rate. A 30 basis point improvement in the margin rate was the result of price increases, the non-recurrence of a charge in the prior year period related to a customer investment write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. , lower inventory reserve requirements and higher amounts earned under vendor incentive programs. Partially offsetting these items were increased customer discounts to meet competitive market conditions. * Total expenses as a percentage of net sales decreased 30 basis points to 22.0 percent for the year-to-date period as a result of expenses increasing at a lower rate than net sales. The increase in expense dollars was due primarily to higher salary expense associated with wage increases, headcount additions, and incentive plan costs; higher health insurance costs; and increased commission expense associated with higher sales. * Lower interest expense resulted from lower average outstanding borrowings. Average outstanding borrowings for the year-to-date period were approximately $10,400,000 lower than the prior year period. * The Company's effective tax rate fell 2.5 percent to 38.3 percent for the year-to-date period. [TABLE OMITTED] [TABLE OMITTED] 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 “Indianapolis” redirects here. For other uses, see Indianapolis (disambiguation). Indianapolis (IPA: [ˌɪndiəˈnæpəlɪs]) is the capital city of the U.S. , and operates three major distribution centers and 167 branches in 39 of the 50 largest metropolitan areas in the country. For more information on FinishMaster via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , visit FinishMaster's website at http://www.finishmaster.com/. |
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