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Letter to the Editor

FinishMaster Net Income Up for Q2; Acquires Color Masters

FinishMaster, Inc., a leading national independent distributor of automotive paints and related accessories, has reported 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. 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.

"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."

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