POMONA, Calif., Jan. 30, 2003 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported record results for its third quarter ended December 27, 2002, reflecting continued momentum in its aftermarket collision parts business.
Net income for the third quarter climbed 29.0 percent to $3.6 million, or $0.24 per diluted share, from $2.8 million, or $0.19 per diluted share, a year ago. Operating income for the same period climbed 27.6 percent to $5.7 million compared with $4.4 million a year earlier. Net sales for the third quarter increased 15.3 percent to $108.5 million from $94.1 million last year.
For the nine months, net sales rose 15.3 percent to $316.4 million from $274.4 million a year ago. Net income for the same period was $9.8 million, or $0.65 per diluted share, compared with a net loss of $26.2 million, or $1.77 per diluted share, a year earlier, which included the cumulative effect of a change in accounting principle, made retroactive to the first quarter of fiscal 2002, as a result of the early adoption of Statement of Financial Accounting Standards (SFAS No.142) "Goodwill and Other Intangible Assets." Operating income for the nine-month period increased more than four-fold to $15.4 million from $3.5 million a year earlier.
"Operating results for the third fiscal quarter represent the eighth year-over-year increase in quarterly operating performance for Keystone," said Charles J. Hogarty, president and chief executive officer.
He cited several factors that continue to have a positive impact on Keystone's financial performance, including more frequent specification of aftermarket parts by certain insurance companies and expanding market acceptance of Keystone's Platinum Plus private label products.
Hogarty noted that same store sales for the third quarter and nine-month period increased approximately nine percent compared with a year ago. Gross margins for the third quarter were 43.8 percent compared with 43.2 percent for the same period in 2001, as a result of better product mix and pricing. The increase in inventory levels, compared with fiscal 2002 year end, reflects an inventory build-up to support the company's business given the pending West Coast port closure last year, which was subsequently settled, and the anticipated increased sales activity, along with inventory from acquisitions.
He highlighted Keystone's continuing strategy to strengthen its distribution capabilities, citing several acquisitions made in the last fiscal quarter of 2002 and the opening of four Greenfield operations. Subsequent to the end of the third fiscal quarter of 2003, the company completed an acquisition of Advance Bumper and Body Parts of Springfield, Missouri.
It is Keystone's understanding that the major parties to a pending class action lawsuit against Erie Insurance Company for specifying aftermarket collision replacement parts, in which Keystone is an additional defendant, have reached an agreement in principle to settle the case. The settlement as proposed would result in the dismissal of all claims against Keystone without cost to the company.
Separately, the company said that Kim D. Wood, a vice president of Keystone, has left the company to pursue other interests.
Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 114 distribution facilities, of which 21 serve as regional hubs, located in 37 states, Vancouver, Canada and Tijuana, Mexico. Its product lines consist of automotive body parts, bumpers, 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 as a result of (i) the cost, time and potential disruption of operations relating to the implementation of a new enterprise management information system which began in July 2002; (ii) the continuing impact of the verdict in the State Farm Mutual Automobile Insurance Company class action, which is on appeal; (iii) Keystone being named as defendant in an action by General Motors challenging the alleged use of certain of its trade marks; and (iv) the uncertainty involved in acquiring businesses and/or opening Greenfield operations. In addition, there can be no assurance that the momentum in sales and net income experienced during the last year will be sustainable. 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 29, 2002, 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 Ended Weeks Ended Weeks Ended Weeks Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2002 2001 2002 2001
---------- ---------- ---------- ----------
(restated)
Net sales $ 108,548 $ 94,149 $ 316,409 $ 274,410
Cost of sales 61,032 53,463 178,541 157,043
---------- ---------- ---------- ----------
Gross profit 47,516 40,686 137,868 117,367
Operating expenses:
Selling and
distribution 32,117 27,800 94,285 83,344
General and
administrative 9,744 8,454 28,141 23,664
Non-recurring -- -- -- 6,796
---------- ---------- ---------- ----------
Operating income 5,655 4,432 15,442 3,563
Other income 454 411 1,280 1,419
Interest expense (117) (117) (381) (550)
---------- ---------- ---------- ----------
Income before income
taxes and
cumulative effect
of a change in
accounting principle 5,992 4,726 16,341 4,432
Income tax provision 2,397 1,938 6,536 1,908
---------- ---------- ---------- ----------
Income before
cumulative effect
of a change in
accounting principle 3,595 2,788 9,805 2,524
Cumulative effect of
a change in
accounting principle
(net of tax of
$4,835) -- -- -- (28,691)
---------- ---------- ---------- ----------
Net income (loss) $ 3,595 $ 2,788 $ 9,805 $ (26,167)
========== ========== ========== ==========
Per Common Share:
Income before
cumulative effect
of a change in
accounting
principle:
Basic $ 0.25 $ 0.19 $ 0.67 $ 0.17
Diluted $ 0.24 $ 0.19 $ 0.65 $ 0.17
Cumulative effect
of a change in
accounting
principle (net of
tax):
Basic $ -- $ -- $ -- $ (1.99)
Diluted $ -- $ -- $ -- $ (1.94)
Net income (loss)
per share:
Basic $ 0.25 $ 0.19 $ 0.67 $ (1.81)
========== ========== ========== ==========
Diluted $ 0.24 $ 0.19 $ 0.65 $ (1.77)
========== ========== ========== ==========
Weighted average
common shares
outstanding:
Basic 14,649,000 14,369,000 14,623,000 14,442,000
========== ========== ========== ==========
Diluted 14,960,000 14,795,000 14,986,000 14,814,000
========== ========== ========== ==========
Keystone Automotive Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
December 27, March 29,
2002 2002
--------- ---------
ASSETS (Unaudited) (Note)
Current Assets:
Cash and cash equivalents $ 2,529 $ 3,652
Accounts receivable, net of
allowance of $1,596 at December
2002 and $1,046 at March 2002 36,585 33,524
Inventories, primarily finished goods 98,822 81,503
Other current assets 6,615 8,090
--------- ---------
Total current assets 144,551 126,769
Plant, property and equipment, net 22,868 19,344
Goodwill 2,255 1,805
Other intangibles, net of
accumulated amortization of
$2,970 at December 2002 and $2,755
at March 2002 1,038 1,397
Other assets 10,603 10,371
--------- ---------
Total assets $ 181,315 $ 159,686
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Credit facility $ 13,450 $ 6,832
Accounts payable 21,236 14,589
Accrued liabilities 8,331 9,889
Current portion of long-term debt 22 75
--------- ---------
Total current liabilities 43,039 31,385
Long-term debt, less
current portion -- 14
Other long-term liabilities 1,528 1,973
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
14,655,000 at December 2002
and 14,583,000 at March 2002 81,013 80,383
Warrant 236 236
Additional paid-in capital 1,864 1,864
Retained earnings 54,176 44,372
Accumulated other comprehensive loss (541) (541)
--------- ---------
Total shareholders' equity 136,748 126,314
--------- ---------
Total liabilities and shareholders'
equity $ 181,315 $ 159,686
========= =========
NOTE: The balance sheet at March 29, 2002 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.