POMONA, Calif., Oct. 31, 2002 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported record sales for its fiscal second quarter, supported by an eight percent increase in same store sales.
Net income for the second quarter of fiscal 2003 ended September 27, 2002 was $2.7 million, or $0.18 per diluted share, compared with a net loss of $2.4 million, or $0.16 per diluted share for the second quarter of fiscal 2002. The loss was the result of a special charge of $6.8 million related to the company's write-off of its investment in an enterprise software system. Excluding the special charge, net income for the second quarter of fiscal 2002 would have been $1.8 million, or $0.12 per diluted share. Net sales for the second quarter of fiscal 2003 increased 14.0 percent to a record $101.1 million from $88.7 million a year earlier.
Net income for the twenty-six week period ended September 27, 2002 was $6.2 million, or $0.41 per diluted share, compared with a net loss of $29.0 million, or $2.01 per diluted share, a year earlier. Net sales for the same period increased 15.3 percent to $207.9 million from $180.3 million a year ago. For the twenty-six week period, same store sales increased nine percent over the prior year.
The net loss for the first six months of fiscal 2002 was due to a $28.7 million charge (net of tax) related to 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," as well as the charge relating to the investment in an enterprise software system.
"Operating results for the quarter represent the seventh consecutive 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 positively impact Keystone's sales, including more frequent specification of aftermarket parts by certain insurance companies and a growing acceptance of Keystone's private label Platinum Plus brand of products.
Subsequent to the end of the quarter Keystone announced it had received its ISO 9001 registration by NSF International Strategic Registrations, Ltd.
"Achieving ISO 9001 certification highlights Keystone's ongoing commitment to quality and has the additional benefit of further distinguishing Keystone as the industry leader for aftermarket collision replacements parts. As the aftermarket collision replacement parts industry continues to gain momentum, we remain optimistic about Keystone's prospects and the outlook for the balance of fiscal 2003," Hogarty added.
Separately, the company said that while it was not adversely impacted by the initial dock-workers strike at West Coast ports, if the strike resumes in late December and were to continue for a prolonged period of time, it could have a material adverse impact on the company.
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 possible closure of West Coast ports through which Keystone obtains a significant amount of its inventory; (iii) the continuing impact of the verdict in the State Farm Mutual Automobile Insurance Company class action, which is on appeal; (iv) Keystone being named as an additional defendant in a class action in Philadelphia challenging the use of aftermarket parts in repairing an insured vehicle; and (v) 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 seven fiscal quarters and the increased operating margin enjoyed to date during fiscal 2003, 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 Income
(In thousands, except share and per share amounts)
(Unaudited)
Thirteen Thirteen Twenty-six Twenty-six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
2002 2001 2002 2001
----------- ----------- ----------- -----------
(restated)
Net sales $ 101,137 $ 88,734 $ 207,861 $ 180,261
Cost of sales 57,259 50,927 117,509 103,580
----------- ----------- ----------- -----------
Gross profit 43,878 37,807 90,352 76,681
Operating expenses:
Selling and
distribution 30,353 27,414 62,168 55,544
General and
administrative 9,356 7,747 18,398 15,210
Non-recurring -- 6,796 -- 6,796
----------- ----------- ----------- -----------
Operating income
(loss) 4,169 (4,150) 9,786 (869)
Other income 403 485 826 1,008
Interest expense (134) (204) (265) (433)
----------- ----------- ----------- -----------
Income (loss) before
income taxes and
cumulative effect
of a change in
accounting
principle 4,438 (3,869) 10,347 (294)
Income tax provision
(Benefit) 1,775 (1,488) 4,139 (30)
----------- ----------- ----------- -----------
Income (loss) before
cumulative effect
of a change in
accounting
principle 2,663 (2,381) 6,208 (264)
Cumulative effect
of a change in
accounting
principle
(net of tax of
$4,835) -- -- -- (28,691)
----------- ----------- ----------- -----------
Net income (loss) $ 2,663 $ (2,381) $ 6,208 $ (28,955)
=========== =========== =========== ===========
Per Common Share:
Income (loss)
before cumulative
effect of a change
in accounting
principle:
Basic $ 0.18 $ (0.16) $ 0.42 $ (0.02)
Diluted $ 0.18 $ (0.16) $ 0.41 $ (0.02)
Cumulative effect
of a change in
accounting
principle (net
of tax):
Basic $ -- $ -- $ -- $ (1.99)
Diluted $ -- $ -- $ -- $ (1.99)
Net income (loss)
per share:
Basic $ 0.18 $ (0.16) $ 0.42 $ (2.01)
=========== =========== =========== ===========
Diluted $ 0.18 $ (0.16) $ 0.41 $ (2.01)
=========== =========== =========== ===========
Weighted average
common shares
outstanding:
Basic 14,622,000 14,442,000 14,610,000 14,405,000
=========== =========== =========== ===========
Diluted 15,081,000 14,442,000 15,126,000 14,405,000
=========== =========== =========== ===========
Keystone Automotive Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
Sept. 27, March 29,
2002 2002
--------- ---------
ASSETS (Unaudited) (Note)
Current Assets:
Cash and cash equivalents $ 2,373 $ 3,652
Accounts receivable, net of
allowance of $1,440 at
September 2002 and $1,046
at March 2002 33,002 33,524
Inventories, primarily
finished goods 89,772 81,503
Other current assets 7,242 8,090
--------- ---------
Total current assets 132,389 126,769
Plant, property and equipment, net 21,284 19,344
Goodwill 2,245 1,805
Other intangibles, net of
accumulated amortization of
$2,850 at September 2002 and
$2,755 at March 2002 1,154 1,397
Other assets 10,334 10,371
--------- ---------
Total assets $ 167,406 $ 159,686
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Credit facility $ 10,762 $ 6,832
Accounts payable 12,381 14,589
Accrued liabilities 9,497 9,889
Current portion of
long-term debt 43 75
--------- ---------
Total current liabilities 32,683 31,385
Long-term debt, less current
portion 1 14
Other long-term liabilities 1,653 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
14,639,000 at September 2002
and 14,583,000 at March 2002 80,930 80,383
Warrant 236 236
Additional paid-in capital 1,864 1,864
Retained earnings 50,580 44,372
Accumulated other comprehensive loss (541) (541)
--------- ---------
Total shareholders' equity 133,069 126,314
--------- ---------
Total liabilities and shareholders'
equity $ 167,406 $ 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.