POMONA, Calif., Nov. 8, 2001 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported results for its second quarter ended September 28, 2001, which reflect increased net sales and operating income, before a non-recurring charge, in large part as a result of the continued strength of insurance related aftermarket collision repair business.
As previously announced, Keystone recorded a special non-recurring, pre-tax charge in the second quarter of $6.8 million related to its investment in an enterprise-wide software conversion. Excluding the charge, net income for the second quarter was $ 1.7 million, or $0.12 per diluted share, compared with net income of $359,000, or $0.02 per diluted share, for the second quarter of fiscal 2001. Including the charge, the company reported a net loss of $2.4 million, or $0.16 per share, including the one-time special charge. Net sales for the quarter were $88.7 million, a 7% increase over the $82.8 million reported a year earlier.
Excluding the charge, net income for the first half of fiscal 2002 was $3.8 million, or $0.26 per diluted share, compared with net income of $1.8 million, or $0.13 per diluted share, for the same period in fiscal 2001. Including the charge, Keystone reported a net loss of $264,000, or $0.02 per share, including the one-time special charge. Net sales for the first half climbed 6.4% to $180.3 million from $169.4 million in fiscal 2001.
In June 2001, Keystone elected to early-adopt SFAS No. 142, effective as of the beginning of fiscal 2002. If Keystone had adopted SFAS No. 142 at the beginning of fiscal 2001, net income per diluted share for the three months and the six months ended September 29, 2000, would have been $0.09 and $0.16, respectively. Applying a fair-value-based test under SFAS No. 142, Keystone has completed its transitional assessment of impairment of goodwill and intangibles and has determined that there may be an impairment. Prior to December 28, 2001, Keystone will determine the amount of impairment loss, if any, and reflect any impairment loss on Keystone's financials effective March 31, 2001.
Charles J. Hogarty, president and chief executive officer, said, "Results for the second quarter and first half of fiscal 2002 reflect encouraging market dynamics in the aftermarket collision repair business, including increased insurance company participation and growing market acceptance of Keystone's Platinum Plus private label aftermarket parts product offerings."
Hogarty noted that same store sales for the second quarter and the six-month period increased 6.5% and 6.2%, respectively, compared with a year ago. Gross margins for the second quarter and the six months improved to approximately 42.5%, as a result of better product mix and pricing.
As announced last month, Keystone decided to record a special charge in the second quarter based upon a thorough evaluation of options following notification from its enterprise software provider that it was ceasing further development of its software. After careful internal technical analysis, Keystone determined that it was impractical to proceed with a company-wide installation of a system that required Keystone to develop the software and manage the system itself. Keystone decided to terminate the current project and is exploring other alternatives, as well as considering options to recover its prior investment. This termination is not affecting day-to-day operations.
Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 113 distribution facilities, of which 21 serve as regional hubs. Its product lines consist of automotive body parts, bumpers, auto glass and remanufactured alloy wheels, as well as paint and other materials used in repairing a damaged vehicle. These products comprise more than 19,000 stock keeping units that are sold to more than 25,000 repair shops throughout the nation.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this press release that are not historical facts are forward-looking statements based on the company's current expectations and beliefs concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those anticipated by the company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the company) and are subject to change based upon various factors, including but not limited to the impact on the company (i) as a result of the termination of the installation of a new comprehensive enterprise software package, the special charge related thereto and the cost and time involved, in implementing a new management information system; (ii) from the continuing impact of the verdict in the State Farm Mutual Automobile Insurance Company class action, which is on appeal, and (iii) from the application of SFAS No. 142. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For a more detailed discussion of some of the ongoing risks and uncertainties of the company's business, see the Company's Form 10-K for the year ended March 30, 2001 on file with the Securities and Exchange Commission.
Keystone Automotive Industries, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Thirteen Thirteen Twenty-Six Twenty-Six
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2001 2000 2001 2000
-------- -------- -------- --------
Net sales $ 88,734 $ 82,834 $180,261 $ 169,445
Cost of sales 50,927 48,312 103,580 97,986
-------- -------- -------- --------
Gross profit 37,807 34,522 76,681 71,459
Operating expenses:
Selling and
distribution 27,414 26,594 55,544 53,530
General and
administrative 7,747 7,457 15,210 15,115
Non-recurring 6,796 -- 6,796 --
-------- -------- -------- --------
Operating (loss)
income (4,150) 471 (869) 2,814
Other income 485 535 1,008 973
Interest expense,
net (204) (396) (433) (692)
-------- -------- -------- --------
(Loss) Income
before income
taxes (3,869) 610 (294) 3,095
Income taxes
(benefit)
expense (1,488) 251 (30) 1,269
-------- -------- -------- --------
Net (loss)
income (2,381) $ 359 (264) $ 1,826
======== ======== ======== ========
(Loss) Earnings
per share:
Basic ($ 0.16) $ 0.02 ($0.02) $ 0.13
======== ======== ======== ========
Diluted ($ 0.16) $ 0.02 ($0.02) $ 0.13
======== ======== ======== ========
Weighted average
shares
outstanding:
Basic 14,442,000 14,399,000 14,405,000 14,478,000
========== ========== ========== ==========
Diluted 14,442,000 14,408,000 14,405,000 14,486,000
========== ========== ========== ==========
Keystone Automotive Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
Sept. 28, March 30, 2001
2001 (Note)
---------- -----------
(Unaudited)
ASSETS
Current Assets:
Cash and
cash equivalents $ 3,710 $ 3,005
Accounts receivable,
net of allowance of
$1,360 at September
2001 and $1,029 at
March 2001 28,882 29,702
Inventories, primarily
finished goods 80,804 82,499
Other current assets 10,182 8,470
------- -------
Total current assets 123,578 123,676
Plant, property and
equipment, net 17,033 21,270
Goodwill, net of
accumulated amortization
of $4,773 at September 2001
and March 2001 33,776 33,531
Other intangibles, net of
accumulated amortization of
$2,514 at September 2001 and
$2,275 at March 2001 1,190 1,168
Other assets 4,145 4,111
------- -------
Total Assets $179,722 $183,756
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Credit facility $13,253 $14,880
Accounts payable 8,896 12,070
Accrued liabilities 8,537 8,293
Current portion
of long-term debt 38 40
------ -------
Total current liabilities 30,724 35,283
Long-term debt,
less current portion 30 49
Other long-term liabilities 2,149 2,483
Shareholders' Equity:
Preferred stock, no par value:
Authorized shares--3,000,000
None issued and outstanding -- --
Common stock, no par value:
Authorized shares--50,000,000
Issued and outstanding shares
14,505,000 at September 2001
and 14,359,000 at March 2001 79,725 78,581
Warrant 236 236
Additional paid-in capital 1,260 1,260
Retained earnings 66,139 66,405
Accumulated other
comprehensive loss (541) (541)
------ ------
Total shareholders'
equity 146,819 145,941
------ ------
Total liabilities and
shareholders' equity $179,722 $183,756
======== ========
NOTE: The balance sheet at March 30, 2001 has been derived from the
audited consolidated financial statements at that date but does
not include all of the information and footnotes required by
accounting principles generally accepted in the United States
for complete financial statements.