POMONA, Calif., Nov. 9, 2000 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported net income for the quarter ended September 29, 2000 of $359,000 or $0.02 per diluted share, on net sales of $82.8 million, compared with net income of $3.2 million, or $0.20 per diluted share, on net sales of $92.5 million for the same period last year.
Net income for the 26-week period year to date was $1.8 million, or $0.13 per diluted share, on net sales of $169.4 million compared with net income of $8.7 million, or $0.53 per diluted share, on net sales of $193.9 million for the 27-week period of the previous year.
Charles J. Hogarty, president and chief executive officer, said: "We are disappointed with the results for the second quarter and first six months of fiscal 2001. Revenues were down sharply, largely due to the adverse decision in a class action lawsuit in October 1999 against State Farm, and the subsequent decision by State Farm and other auto insurers to temporarily suspend the use of certain aftermarket collision replacement parts.
We are encouraged by recent developments whereby two auto insurers who had previously suspended the use of certain aftermarket parts have indicated that they intend to once again include certain aftermarket parts on repair estimates subject to stringent quality control standards.
Gross margins were impacted primarily as a result of two factors: In response to the fact that insurers were writing less aftermarket parts on estimates, the company emphasized the sale of non-affected product lines including paint, paint supplies, radiators, condensers, wheels and recycled bumpers. Certain products, primarily paint and supplies have a lower gross margin. In addition, margins were pressured by pricing competition as a result of lower volumes industry-wide.
While expenses were generally in line with expectations, the Company did incur higher costs related to:
-- Increased fuel costs of $274,000 for the quarter and $671,000
year to date.
-- Advertising costs of approximately $300,000 related to the
Platinum Plus rollout.
-- Moving costs estimated to be $400,000 to move and/or consolidate
warehouse facilities in Minnesota, Massachusetts, Michigan and
Ohio. We anticipate that these moves and consolidations will
improve efficiencies and profitability in the second half of the
year in these locations.
We continue to believe in the economic value provided by our high quality aftermarket collision replacement parts. The introduction of the Platinum Plus private label product line was designed to give consumers, collision repair facilities and insurers confidence in these parts, which are guaranteed with respect to fit, finish and quality for the life of the vehicle."
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 success of the company's cconsolidation program, the acceptance of aftermarket collision replacement parts by insurance companies, a successful resolution of the pending appeal of the judgement in the State Farm class action lawsuit, a successful resolution of other pending class action lawsuits challenging the use of aftermarket parts and the cost related to the implementation of a new comprehensive enterprise software system. 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 share and per share amounts)
(Unaudited)
Thirteen Thirteen
Weeks Ended Weeks Ended
September 29, October 1,
2000 1999
------------ ------------
Net sales $ 82,834 $ 92,501
Cost of sales 48,312 53,218
------------ ------------
Gross Profit 34,522 39,283
Operating Expenses:
Selling and distribution expenses 26,594 26,848
General and administrative 7,457 7,566
------------ ------------
Operating income 471 4,869
Other income 535 633
Interest expense, net (396) (93)
------------ ------------
Income before income taxes 610 5,409
Income taxes 251 2,218
------------ ------------
Net income $ 359 $ 3,191
============ ============
Earnings per share:
Basic
$ 0.02 $ 0.20
============ ============
Diluted $ 0.02 $ 0.20
============ ============
Weighted average shares outstanding:
Basic 14,399,000 16,117,000
============ ============
Diluted 14,408,000 16,219,000
============ ============
Twenty Six Twenty Seven
Weeks Ended Weeks Ended
September 29, October 1,
2000 1999
------------ ------------
Net sales $ 169,445 $ 193,882
Cost of sales 97,986 109,693
------------ ------------
Gross Profit 71,459 84,189
Operating Expenses:
Selling and distribution expenses 53,530 55,422
General and administrative 15,115 15,223
------------ ------------
Operating income 2,814 13,544
Other income 973 1,319
Interest expense, net (692) (141)
------------ ------------
Income before income taxes 3,095 14,722
Income taxes 1,269 6,036
------------ ------------
Net income $ 1,826 $ 8,686
============ ============
Earnings per share:
Basic
$ 0.13 $ 0.53
============ ============
Diluted $ 0.13 $ 0.53
============ ============
Weighted average shares outstanding:
Basic 14,478,000 16,435,000
============ ============
Diluted 14,486,000 16,520,000
============ ============
Keystone Automotive Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
Sept. 29, March 31,
2000 2000
(Unaudited) (Note)
-------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 3,589 $ 2,884
Accounts receivable, net 26,393 27,644
Inventories, primarily finished goods 80,612 80,176
Other current assets 7,125 7,317
-------- --------
Total current assets 117,719 118,021
Plant, property and equipment, net 25,529 23,589
Other assets 40,725 42,207
-------- --------
Total assets 183,973 183,817
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Credit facility $ 16,838 $ 12,500
Accounts payable 9,998 12,693
Accrued liabilities 6,464 6,676
Total current liabilities 33,300 31,869
Other long-term liabilities 1,697 1,753
Shareholders' Equity:
Common stock, no par value:
Issued and outstanding shares 14,399,000
at September 2000 and 14,892,000 78,773 81,817
At March 2000
Additional paid-in capital 1,496 1,496
Retained earnings 68,707 66,882
-------- --------
Total shareholders' equity 148,976 150,195
-------- --------
Total liabilities and shareholders' equity 183,973 183,817
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NOTE: The balance sheet at March 31, 2000 has been derived from the audited consolidated financial statements at the date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.