profits plunged 46% from a year ago as the company continued to complain about regulatory red tape.

For its first quarter ended Dec. 31, the Sun Valley, Calif., maker of aircraft coatings earned $39,305, or 4 cents a share, down from the year-ago $72,692, or 6 cents a share. Revenue rose to $1.13 million from $1.07 million a year earlier.

The company cited higher raw material and labor costs for the profit decline, as well as "additional costs associated with increased regulatory reporting requirements of the

Securities and Exchange Commission and Nasdaq."

That line of commentary is nothing new for Flamemaster. In September, the company said it would

deregister its stock with regulators for the purpose of going private and reducing its obligations under the Sarbanes-Oxley Act of 2002. Flamemaster then proposed a 1-for-10 reverse split in an effort to consolidate the stock and eliminate odd-lot shareholdings.

The going-private plans were upended the next month, when Flamemaster

agreed to a merger with Best Candy of Arizona. Under that deal, which is still pending, Flamemaster would spin off its current operations as Flamemaster Aerospace. Flamemaster shareholders would get those assets in a dividend to be declared just before the Best Candy acquisition.

On Friday, Flamemaster noted the Best Candy plans but offered no details on when or if the deal might close. "Flamemaster's management believes that the merger with the Best Group, if completed, would be beneficial to Flamemaster's shareholders," the company said in Friday's press release. "There can be no assurance that the merger with the Best Group will be completed. Nor can management assess the length of time it will take to close the transaction."

Flamemaster also noted that year-ago figures are adjusted for a 9-for-8 stock split that took effect in May 2004, the 1-for-10 reverse split of last October and a 7-for-1 split that took effect in December.

Early Friday, Flamemaster rose 55 cents to $8.71.