POMONA, Calif., June 1, 1999 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq: KEYS) today reported record consolidated sales and earnings for the fourth quarter and fiscal year ended March 26, 1999.
Net sales for the fourth quarter of fiscal 1999 increased 35.4 percent to $96.7 million, compared with $71.4 million for the same period last year. Net income for the quarter jumped 44.2 percent to $4.9 million, or $0.28 per diluted share, compared with $3.4 million, or $0.23 per diluted share, a year ago. During the quarter, the company expensed nonrecurring pretax items totaling approximately $1.3 million, or $0.05 per diluted share, for costs related to consolidation of duplicate warehouse facilities resulting from recent acquisitions, severance costs and the write down of costs associated with an abandoned computer project.
Net sales for the year increased 25.9 percent to $332.0 million compared with $263.8 million for the previous year. Net income for the year increased 24.8 percent to $17.8 million, or $1.05 per diluted share, in fiscal 1999 compared with $14.2 million, or $1.01 per diluted share, last year. On a pro-forma basis, fully diluted earnings per share were $0.91 in fiscal 1998. Nonrecurring pretax charges totaled $1.8 million, or $0.06 per diluted share, for the fiscal year ended March 26, 1999 for the reasons discussed above, nonrecurring pretax charges of totaled $1.1 million, or $0.05 per diluted share, for the fiscal year ended March 27, 1998.
Charles J. Hogarty, President and Chief Executive Officer, said, "Fiscal 1999 was a year of significant achievement for Keystone Automotive Industries, Inc., both operationally and financially.
"With the acquisition of Republic Automotive, Midwest Bumper and five smaller companies, we made significant progress toward our goal of building a nationwide distribution network for aftermarket collision replacement parts. In addition, we completed startups in Memphis, Tennessee and Cincinnati, Ohio.
"Excluding the acquisition of Republic Automotive, the six other acquisitions during the fiscal year comprised an aggregate purchase price of approximately $20.9 million. Of the total purchase price, $17.9 million was paid in cash, funded through operating cash flow. Subsequent to our fiscal year-end, we completed an acquisition in Washington State which marks our entrance into the Pacific Northwest region.
"Operationally, we continued to see margin improvement both at the gross and operating levels. This improvement is the result of a number of factors, including enhanced purchasing power, economies of scale and our ability to sell more high margin products through our existing network."
Mr. Hogarty added, "Keystone's quality remanufactured alloy wheel program continues to gain acceptance in the marketplace and we now have nine wheel remanufacturing operations. Moreover, we have added several plastic recycling operations, bringing the total number of plastic bumper recycling operations to 33.
"Keystone began in 1947 as a bumper recycler. We have always believed that recycling is a cost effective, environmentally friendly method of repairing a collision-damaged vehicle. Clearly this is validated by the recent entrance of a major original equipment manufacturer into the salvage business."
Mr. Hogarty stated that, "From a financial perspective, we concluded fiscal 1999 in an exceptionally strong financial condition. Following the acquisition of Republic Automotive in June 1998, we moved quickly to sell its mechanical hard parts operations, completing this objective by December 1998. The cash generated from selling the hard parts operations was used in part to buy back 1,000,000 Keystone common shares in the open market. This initial share repurchase program was concluded in fiscal 1999. We began fiscal 1999 with approximately 10.9 million of cash and ended the year with approximately 17.8 million in cash and no debt.
"Our board of directors has indicated its confidence in the cash generating capacity of the company by approving a second 1,000,000-share buyback program during fiscal 2000. To date, we have repurchased approximately 180,000 additional shares.
"Keystone ended fiscal 1999 exceptionally well positioned to take advantage of a number of favorable trends occurring in the marketplace. We will continue to execute our strategy, which is to build long-term value for our shareholders, customers, employees and consumers, emphasizing strategic acquisitions, increases in same store sales and greenfield start-ups in selected cities."
Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 112 warehouses, 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 continued acceptance of aftermarket collision replacement parts, a successful resolution of the pending State Farm class action lawsuit, implementation of a new comprehensive enterprise software system and the Company's ability to find suitable acquisition candidates and acquire entities on terms favorable to the Company. 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 filings with the Securities and Exchange Commission.
Keystone Automotive Industries, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share and share amounts)
(Unaudited)
Three Months Ended Year Ended
March 26, March 27, March 26, March 27,
1999 1998 1999 1998
Net sales $ 96,720 $ 71,414 $ 332,047 $ 263,802
Cost of sales 51,942 40,638 184,939 49,855
Gross profit 44,778 30,776 147,108 113,947
Operating expenses:
Selling and distribution
Expenses 28,424 19,892 93,170 73,551
General and
administrative 7,156 5,325 24,873 18,101
Non-recurring expenses 1,309 119 1,814 1,147
Operating income 7,889 5,440 27,251 21,148
Other income 253 459 2,407 1,086
Interest expense (24) (33) (50) (504)
Income before income taxes 8,118 5,866 29,608 21,730
Income taxes 3,247 2,501 11,843 7,497
Net income $ 4,871 $ 3,365 $ 17,765 $ 14,233
Earnings per share:
Basic $ 0.28 $ 0.23 $ 1.06 $ 1.02
Diluted $ 0.28 $ 0.23 $ 1.05 $ 1.01
Weighted average shares outstanding:
Basic 17,329 14,726 16,784 13,915
Diluted 17,436 14,953 16,914 14,105
PRO FORMA
Net income, as
previously reported $ 4,871 $ 3,365 $ 17,765 $ 14,233
Pro forma tax adjustment $ --- $ --- $ --- $ (1,345)
Pro forma net income $ 4,871 $ 3,365 $ 17,765 $ 12,888
Pro forma net income
per share-basic $ 0.28 $ 0.23 $ 1.06 $ 0.93
Pro forma net income
per share-diluted $ 0.28 $ 0.23 $ 1.05 $ 0.91
Pro forma information gives effect to an income tax adjustment to reflect the taxation of Inteuro and Car Body income as a C corporation rather than as an S corporation, at an estimated statutory rate of approximately 40 percent in 1998.