Keystone Automotive Industries Reports Record Fiscal 2007 Third Quarter Results

Net Income Up 32.1 Percent for Quarter; Same Store Sales 11.4 Percent


POMONA, Calif., Jan. 30, 2007 (PRIME NEWSWIRE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported record earnings and sales for its fiscal 2007 third quarter ended December 29, 2006, supported by strong demand for generic replacement parts and the benefits of its strategies to enhance in-stock availability of parts across the company's network.

Net income for the fiscal third quarter climbed 32.1 percent to $9.4 million, or $0.57 per diluted share, from $7.1 million, or $0.44 per diluted share, a year ago. Operating income increased 30.8 percent to $15.0 million from $11.5 million a year ago. Net sales for the fiscal third quarter climbed 12.7 percent to $185.3 million from $164.4 million last year. Same store sales growth for the third quarter was 11.4 percent.

Net income for the nine months of fiscal 2007 climbed 28.6 percent to $18.9 million, or $1.15 per diluted share, from $14.7 million, or $0.91 per diluted share, a year ago. Operating income for the same period increased 34.1 percent to $30.5 million from $22.8 million a year ago. Net sales for the nine months climbed 14.6 percent to $513.8 million from $448.4 million last year. Same store sales growth for the nine-month period was 11.1 percent.

Gross margin for the fiscal third quarter was 45.3 percent compared with 45.2 percent last year. As previously noted, the company began the process of implementing a cross-dock strategy to enhance the delivery of product to its distribution centers and customers, which results in the elimination of certain expenses previously included in selling and distribution costs and replaced with costs included in cost of sales. As a result, gross margin for the quarter was reduced by approximately $1.6 million, while selling and distribution costs were positively impacted by approximately $1.3 million. The company emphasized that its ongoing cross-dock implementation strategy is designed to enhance availability of parts and increase top-line sales growth.

"The company's strategic focus on parts availability throughout the network continues to be an important catalyst to our success. Specific organizational initiatives designed to enhance efficiency and foster relationships with automotive body shops have been fundamental to Keystone's growth, and results for the quarter clearly highlight that our strategy is working," said Richard L. Keister, president and chief executive officer.

Commenting on the continuing International Trade Commission investigation with respect to the importation and sale of certain aftermarket collision replacement parts for the Ford Motor Company's F-150 truck, Keister reiterated his previously stated position that this legal initiative represents an ongoing campaign by original equipment manufacturers to deny consumers an alternative product for automotive collision repair. "This case could have far reaching consequences beyond just the automotive industry and we intend to vigorously defend our right to distribute aftermarket parts, and continue to build coalitions to counter the power of the original equipment manufacturers and provide alternatives to consumers," Keister said.

He noted that fiscal third quarter results were not significantly impacted by higher legal fees associated with the ongoing legal dispute discussed above. However, nine-month results include approximately $1.4 million in additional legal fees. Third quarter results also reflect a net income impact of approximately $300,000 associated with the company's start-up bumper remanufacturing facility in Mexico. For the nine-months, the Mexico remanufacturing facility impacted net income by approximately $700,000.

Keister indicated that results for the company's fiscal third quarter were supported by a 15.9 percent increase in the sale of automotive body parts, which includes fenders, hoods, headlights, cooling, grills and crash parts.

Teleconference

Richard L. Keister, president and chief executive officer, and Jeff Gray, chief financial officer, will host an investor conference call today at 9:00 a.m. Pacific Time to discuss the company's financial results and operations for the fiscal third quarter. The call will be open to all interested investors through a live audio broadcast by calling (877) 440-9648 (domestic) or (706) 679-0668 (international) with call ID number 6978322. For those who are not available to listen to the live broadcast, the call will be archived for two weeks on Keystone's website. A telephone playback of the conference call will also be available from 10:00 a.m. Pacific time Tuesday, January 30 through 9:00 p.m. Sunday, February 4 by calling (800) 642-1687 (domestic) or (706) 645-9291 (international) and using access code: 6978322.

About Keystone

Keystone Automotive Industries, Inc. distributes its products primarily to collision repair shops through its 136 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 are sold to more than 25,000 repair shops throughout the United States and Canada.

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 ultimate disposition of the International Trade Commission investigation and its impact on the company; the ability to achieve the initiatives in place for fiscal 2007; the impact of increased competition and the aggressive actions being taken by certain car manufacturers to negatively impact the aftermarket collision replacement parts industry, including patenting vehicle parts sold by the aftermarket, instituting litigation relating to alleged trademark violations and lobbying state legislature to adopt legislation favoring the OEM's; the impact on the company as a result of actions which have been, or in the future may be, taken by insurance companies with respect to the use of aftermarket products in the repair of vehicles; the impact of moving the company's chief executive offices to Nashville; the effect of policies adopted by CAPA; and the costs of litigation. Reference is also specifically made to the "Risk Factors" section set forth in the company's Form 10-K Annual Report filed with the Securities and Exchange Commission (SEC) for the fiscal year ended March 31, 2006 and in Part II, Item 1A of its Form 10-Qs filed with the SEC thereafter for additional information on the risks and uncertainties facing 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.



                 KEYSTONE AUTOMOTIVE INDUSTRIES, INC.
              CONDENSED CONSOLIDATED STATEMENT OF INCOME
               (In thousands, except per share amounts)
                              (Unaudited)


                         Thirteen    Thirteen   Thirty-nine Thirty-nine
                        Weeks Ended Weeks Ended Weeks Ended Weeks Ended
                          Dec. 29,    Dec. 30,    Dec. 29,    Dec. 30,
                           2006        2005        2006        2005
                         ---------   ---------   ---------   ---------
 Net Sales                 185,263     164,387     513,769     448,389

 Cost of Sales             101,419      90,143     285,731     248,448

                         ---------   ---------   ---------   ---------
 Gross Profit               83,844      74,244     228,038     199,941

 Operating Expenses:
   Selling &
    Distribution            50,680      47,897     146,933     135,494
   General &
    Administrative          18,116      14,840      50,569      41,676
                         ---------   ---------   ---------   ---------
 Operating Income           15,048      11,507      30,536      22,771

 Other Income                  344         607       1,029       1,988
 Interest Expense              (35)       (334)       (281)       (466)


                         ---------   ---------   ---------   ---------
 Income Before
  Income Taxes              15,357      11,780      31,284      24,293

 Income Taxes                5,965       4,672      12,389       9,598

                         ---------   ---------   ---------   ---------

 Net Income              $   9,392   $   7,108   $  18,895   $  14,695
                         =========   =========   =========   =========

 Per Common Share
   Income
     Basic:              $    0.58   $    0.44   $    1.16   $    0.92
                         =========   =========   =========   =========
     Diluted:            $    0.57   $    0.44   $    1.15   $    0.91
                         =========   =========   =========   =========

   Weighted average
    common shares
    outstanding:
     Basic:                 16,315      16,008      16,256      15,956
                         =========   =========   =========   =========
     Diluted:               16,488      16,183      16,441      16,094
                         =========   =========   =========   =========



 Note: The preliminary condensed consolidated statements of income have 
 been prepared on a basis consistent with the company's previously 
 prepared statements of income filed with the Securities and Exchange 
 Commission for its prior quarter and annual reports, but do not include 
 the footnotes required by generally accepted accounting principles for 
 complete financial statements.



                 KEYSTONE AUTOMOTIVE INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)


                                               December 29,  March 31,
                                                   2006        2006
                                               ------------  ----------
                                               (Unaudited)  (Unaudited)
                      ASSETS

 Current Assets:
   Cash and cash equivalents                     $  6,503     $  4,733
   Accounts receivable, net of allowance
    of $1,072 at December 2006 and $935
    at March 2006                                  61,440       56,774

   Inventories, primarily finished goods          135,661      128,458
   Other current assets                            13,789       17,137
                                                 --------     --------
       Total current assets                       217,393      207,102
 Plant, property and equipment, net                35,957       33,713
 Goodwill                                          39,446       39,369
 Other intangibles, net of accumulated
  amortization of $1,855 at December 2006
  and $1,544 at March 2006                          1,091        1,402
 Other assets                                       8,186        7,107
                                                 --------     --------
       Total assets                              $302,073     $288,693
                                                 ========     ========

         LIABILITIES AND SHAREHOLDERS' EQUITY

 Current Liabilities:
   Credit facility                               $     --     $  9,544
   Accounts payable                                25,880       35,310
   Accrued liabilities                             27,380       19,519
                                                 --------     --------
     Total current liabilities                     53,260       64,373
   Other long-term liabilities                      1,459        1,373
   Commitments and contingencies                       --           --
 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 16,332
      at December 2006 and 16,269 at
      March 2006, at stated value                 101,196       97,956
     Restricted Stock                                  --        1,154
   Additional paid-in capital                      13,786       10,470
   Retained earnings                              132,254      113,359
   Accumulated other comprehensive income             118            8
                                                 --------     --------
       Total shareholders' equity                 247,354      222,947
                                                 --------     --------
       Total liabilities and shareholders'
        equity                                   $302,073     $288,693
                                                 ========     ========

 Note: The preliminary condensed consolidated balance sheets have been
 prepared on a basis consistent with the company's previously prepared
 balance sheets filed with the Securities and Exchange Commission for
 its prior quarter and annual reports, but do not include the
 footnotes required by generally accepted accounting principles for
 complete financial statements.

            

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