POMONA, Calif., Aug. 5, 2004 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported results for its fiscal 2005 first quarter ended July 2, 2004 -- a fourteen-week period, compared with a thirteen-week period a year earlier.
Net sales for the first quarter increased 19.5 percent to a record $141.1 million from $118.1 million a year earlier. Net income for the quarter was $4.1 million, or $0.26 per diluted share, compared with $4.2 million, or $0.28 per diluted share, for the quarter a year ago.
"Net sales for the quarter were in line with expectations, as our core aftermarket collision parts business remains robust. Using weekly averaging, same store sales for the fourteen-week first quarter increased approximately six percent over the thirteen-week first quarter a year ago. Net income, however, was impacted by higher than anticipated costs in several categories," said Charles J. Hogarty, president and chief executive officer.
He noted that overall costs for the quarter were higher than anticipated by about $1,525,000. Margins were negatively impacted by inventory adjustments as a result of the conversion to the new Prelude management information system ($625,000); selling expenses were higher than anticipated primarily as a result of increased fuel costs ($250,000) and lease termination costs ($150,000), and administrative expenses were negatively impacted as a result of the retirement of Mr. Hogarty and the hiring of Mr. Richard L. Keister ($500,000). While the majority of these expenses ($1,275,000) are non-recurring in nature, Mr. Hogarty stated that management will be focusing on reducing expenses as a percentage of sales and increasing margins to more recent levels during the remainder of fiscal 2005.
"While we are obviously disappointed in our bottom-line performance for the quarter, our top-line results demonstrate the ongoing opportunities as a result of the continued acceptance of aftermarket parts in the repair of vehicles. The company continues to generate strong cash flow, which will enable Keystone to further expand through acquisitions and internal growth, while keeping borrowings low," Hogarty said.
Since fiscal year end in March, the company has converted an additional 22 distribution facilities to its new management information system. The total number of facilities converted is now approximately 80 percent. The company noted that its Drummondville facility located outside Montreal, Canada, was destroyed by a fire in late January. Management does not anticipate any material impact on the company's overall operations.
Hogarty added that Keystone remains focused on a strategy of further expanding its distribution capabilities, with two small acquisitions completed during the quarter.
"Keystone has a very solid business model. I am confident we will leverage future sales growth into real earnings growth," said Keister, the incoming chief executive officer.
About Keystone
Keystone Automotive Industries, Inc. distributes its products primarily to collision repair shops through its 125 distribution facilities, of which 22 serve as regional hubs, located in 38 states and Canada. 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 United States, Canada, and Mexico.
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 impact on operations, including the company's results of operations, relating to the implementation of a new enterprise management information system which began in July 2002; (ii) the impact on, and cost to, the company from the retirement of Mr. Hogarty and the hiring of Mr. Keister as his successor effective August 18, 2004; (iii) the continuing impact of the verdict in the State Farm Mutual Automobile Insurance Company class action, which is on appeal, as well as the possible impact of the pending state-wide class action against Farmers Group in California; (iv) Keystone being named as defendant in an action by General Motors challenging the alleged use of certain of its trade marks; 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 experienced during the last three fiscal years 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 periodic reports on file with the Securities and Exchange Commission and its Form 10-K for the year ended March 26, 2004 which was filed with the Securities and Exchange Commission on June 9, 2004.
(Financial tables follow)
Keystone Automotive Industries, Inc.
Condensed Consolidated Statements of Income
(In thousands, except share and per share amounts)
(Unaudited)
Fourteen Thirteen
Weeks Ended Weeks Ended
July 2, 2004 June 27, 2003
------------ -------------
Net sales $ 141,117 $ 118,100
Cost of sales 79,912 66,569
------------ ------------
Gross profit 61,205 51,531
Operating expenses:
Selling and distribution 41,691 34,672
General and administrative 13,634 10,349
------------ ------------
Operating income 5,880 6,510
Other income 897 544
Interest expense (95) (174)
------------ ------------
Income before income taxes 6,682 6,880
Income taxes 2,629 2,700
------------ ------------
Net income $ 4,053 $ 4,180
============ ============
Per Common Share:
Net income per share:
Basic $ 0.26 $ 0.28
============ ============
Diluted $ 0.26 $ 0.28
============ ============
Weighted average common
shares outstanding:
Basic 15,469,000 14,760,000
============ ============
Diluted 15,766,000 15,118,000
============ ============
Keystone Automotive Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
July 2, 2004 March 26, 2004
------------ ------------
(Unaudited) (Note)
ASSETS
Current Assets:
Cash and cash equivalents $ 5,685 $ 3,176
Accounts receivable, net of
allowance of $832 at July
2004 and $887 at March
2004 45,256 44,005
Inventories, primarily
finished goods 109,706 107,221
Other current assets 8,636 11,532
------------ ------------
Total current assets 169,283 165,934
Plant, property and equipment,
net 32,244 30,652
Goodwill 10,053 9,662
Other intangibles, net of
accumulated amortization of
$3,545 at July 2004 and
$3,565 at March 2004 1,208 1,323
Other assets 9,114 8,342
------------ ------------
Total Assets $ 221,902 $ 215,913
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Credit facility $ 5,849 $ 10,000
Accounts payable 22,982 18,598
Accrued liabilities 14,281 14,477
------------ ------------
Total current liabilities 43,112 43,075
Other long-term liabilities 1,197 1,311
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 15,545,000 at
July 2004 and 15,443,000
at March 2004 90,883 89,492
Restricted Stock 1,004 180
Additional paid-in capital 5,967 5,967
Retained earnings 80,893 76,841
Accumulated other
comprehensive loss (1,154) (953)
------------ ------------
Total shareholders' equity 177,593 171,527
------------ ------------
Total liabilities and
shareholders' equity $ 221,902 $ 215,913
============ ============
NOTE: The balance sheet at March 26, 2004 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.