Pomona, CA - November 4, 1998 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq: KEYS) today reported second quarter net income for the period ended September 25, 1998 of $4,082,000, or $0.23 per share, after costs incurred to consolidate duplicate warehouse facilities, on net sales of $81,438,000, up from pro forma net income for the comparable period a year earlier of $3,406,000, or $0.23 per share, on net sales of $63,396,000 reported in the comparable quarter a year ago. Year ago net income is on a pro forma basis, giving effect to an income tax adjustment to reflect taxation of the income of Inteuro and Car Body, acquired in January 1998, as "C" corporations, rather than "S" corporations, at an estimated statutory rate of approximately 39 percent. Keystone had 17,797,000 weighted average fully diluted shares outstanding in the second quarter compared with 14,800,000 for the prior year.
For the six months ended September 25, 1998, Keystone reported net income of $7,942,000, or $0.49 per share, on net sales of $151,310,000, compared with pro forma net income of $6,127,000, or $0.46 per share, on net sales of $126,141,000 for the six month period ended September 26, 1997. Fully diluted weighted average shares outstanding for the six months ended September 1998 were 16,363,000 compared with 13,390,000 fully diluted weighted average shares for the comparable prior year period.
Commenting on the second quarter and year to date results, Charles Hogarty, President and Chief Executive Officer, stated "The first six months of this year have been very active for the Company. We completed the Republic Automotive acquisition at the end of June and by the end of August, we had been able to divest most of its mechanical hard parts operations so that we could continue to focus on our core business of distributing aftermarket collision replacement parts.
"During the quarter, we also consolidated duplicate warehouse facilities in seven locations. We expect this action will eliminate duplicate overhead expenses and make our operations more efficient. Year-to-date, same store sales increased seven percent compared with the year ago period, which is in line with our expectations. While total revenues were up 28 percent for the quarter and 20 percent year to date, they were slightly below consensus estimates due to several factors. Most notably, the attention and effort required to divest the hard parts operations and to consolidate duplicate facilities resulted in our only completing one acquisition in the first half of this year. We do expect to complete one or more smaller acquisitions during the second half of this year."
The Company also announced that its Board of Directors has authorized the repurchase of up to 1 million Keystone common shares over the next 12 months.
Mr. Hogarty said, "The recent divestiture of the mechanical hard parts operations acquired as a part of the Republic Automotive acquisition combined with cash flow from operations has resulted in net cash of approximately $44 million dollars at the end of the quarter. We believe that this share repurchase program is a prudent use of cash that will return value to our shareholders."
Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 100 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 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 Six Months Ended
Sept. 25, Sept. 26, Sept. 25, Sept. 26,
1998 1997 1998 1997
Net sales $81,438 $63,396 $151,310 $126,141
Cost of sales 46,404 35,973 85,938 72,214
Gross profit 35,034 27,423 65,372 53,927
Operating expenses:
Selling and distribution expenses 22,264 17,864 41,812 34,504
General and administrative 6,341 4,204 11,127 8,684
Service Center consolidation costs 402 -- 402 --
Severance costs -- -- -- 705
Operating income 6,027 5,355 12,031 10,034
Other income 742 348 1,182 436
Interest expense (12) (96) (23) (403)
Income before income taxes 6,757 5,607 13,190 10,067
Income tax 2,675 1,683 5,248 2,890
Net Income $ 4,082 $ 3,924 $ 7,942 $ 7,177
Earnings per share
Basic $ 0.23 $ 0.27 $ 0.49 $ 0.54
Diluted $ 0.23 $ 0.27 $ 0.49 $ 0.54
Weighted average
shares outstanding
Basic 17,590,000 14,624,000 16,113,000 13,259,000
Diluted 17,797,000 4,800,000 16,363,000 13,390,000
PRO FORMA
Net income, as previously reported $ 4,082 $ 3,924 $ 7,942 $ 7,177
Pro forma tax adjustment $ - $ (518) $ - $ (1,050)
Pro forma net income $ 4,082 $ 3,406 $ 7,942 $ 6,127
Pro forma net income per share
Basic $ 0.23 $ 0.23 $ 0.49 $ 0.46
Diluted $ 0.23 $ 0.23 $ 0.49 $ 0.46