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Letter to the Editor
Monday November 6
FinishMaster Announces Q3 Financial Results
FinishMaster, Inc. has reported net income for the quarter ended September 30, 2006 of $5,192,000 compared with net income of $4,303,000 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 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 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 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.
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.
For the nine months ended September 30, 2006, net income was $14,894,000, compared to net income of $11,803,000 in the prior year period. The improvement in net income for the year-to-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 and 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.
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 167 branches in 39 of the 50 largest metropolitan areas in the country.
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