POMONA, Calif., May 25, 2000 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported consolidated sales and earnings for the fourth quarter and fiscal year ended March 31, 2000.
Net sales for the fourth quarter of fiscal 2000 were $92.4 million compared with $96.7 million for the same period last year. The company reported income of $0.14 per diluted share before recording a loss on impairment of long lived assets in accordance with FAS 121 totaling $3.9 million. After recording the loss on impairment, the company posted a loss of ($0.01) per diluted share. During the prior year period, the company reported net income of $4.9 million, or $0.28 per diluted share.
Net sales for the year (53 weeks) increased 12.2 percent to $372.5 million compared with $332.0 million for the previous year (52 weeks). Net income for fiscal 2000 decreased 45 percent to $9.8million, or $0.62 per diluted share, compared with $17.8 million, or $1.05 per diluted share, last year.
Charles J. Hogarty, President and Chief Executive Officer, said, "Fiscal 2000 was a challenging year for the company. We began the year with a record breaking first quarter. We spent the last half of the year responding to the adverse court decision in October 1999 against State Farm Insurance Company for specifying the use of aftermarket collision replacement parts when repairing a collision damaged vehicle. Subsequent to the decision, State Farm, Nationwide and Farmers Insurance companies temporarily suspended the use of certain aftermarket parts.
"Same store sales were down 8.2 percent for the fourth quarter of fiscal 2000 compared to the prior year. For the full fiscal year, same store sales were down 1.1 percent compared to the prior year. This reduction in revenue had a negative impact on earnings at most of our operations. Other factors negatively impacting earnings were acquisitions made during the first half of the year and startup operations in Cincinnati, Ohio; Little Rock, Arkansas; Elkhart, Indiana; Lubbock, Texas and Esconaba, Michigan. These operations have had difficulty achieving revenue targets due to the timing of the State Farm decision.
"All of us at Keystone continue to believe in the long-term viability of the industry in general and the company in particular. We believe that the availability of aftermarket collision parts creates significant benefits to consumers by providing competition in the marketplace and has contributed to lower auto insurance premiums. The availability of high quality aftermarket collision parts allows consumers to restore their vehicles to their pre-loss condition in a cost effective manner.
"We have made a concerted effort at all our locations to address the revenue shortfall, which has resulted from the State Farm decision, by emphasizing non-affected products such as paint, wheels, radiators, condensers and recycled bumpers, and we have also implemented cost reduction policies at all locations."
Hogarty indicated that in addition to emphasing non-affected products, the company has taken a number of other steps to restore revenue growth, including:
-- Introducing a Platinum Plus private label product line.
-- Entering into an exclusive supplier agreement with LKQ
Corporation to supply remanufactured OEM alloy wheels to their
salvage operations across the country.
-- Entering into a strategic alliance with Copart, Inc. whereby
Keystone will sell aftermarket collision parts to Copart's
automotive rebuilder customers.
-- Making an equity investment in GoMedia, Inc., an Internet-based
claims management system.
Hogarty noted that management continues to be encouraged by strong cash flows from operations and is focused on inventory reductions and cost controls. Moreover, the company is using the cash flows to pay down its credit facility and to continue its share repurchase program.
Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 118 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 impact on the company of (i) the implementation of a new comprehensive enterprise software package for accounting, distribution and inventory planning (ii) the impact on the Company of the verdict in the State Farm Mutual Automobile Insurance company class action, which is on appeal, and (iii) the possibility that other automobile insurance companies will suspend the use of aftermarket collision replacement parts in repairing covered vehicles. 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 Operations
(In thousands, except per share and share amounts)
(Unaudited)
Thirteen Thirteen
weeks ended weeks ended
March 31, 2000 March 26, 1999
Net sales $ 92,387 $ 96,720
Cost of sales 53,177 53,153
------------- -------------
Gross profit 39,210 43,567
Operating expenses:
Selling and distribution 28,328 28,422
General and administrative 7,606 7,176
Non-recurring expenses 0 1,309
Loss on impairment of
long lived assets 3,881 0
------------- -------------
Operating (loss) income (605) 6,660
Other income 729 1,463
Interest expense (485) (24)
------------- -------------
(Loss) income before
income taxes (361) 8,099
Income tax provision
(benefit) (147) 3,247
------------- -------------
Net (loss) income $ (214) $ 4,852
============= =============
Earnings (loss) per share:
Basic $ (0.01) $ 0.28
============= =============
Diluted $ (0.01) $ 0.28
============= =============
Weighted average shares
outstanding:
Basic 15,257,000 17,329,000
============= =============
Diluted 15,257,000 17,436,000
============= =============
Fifty-three Fifty-two
weeks ended weeks ended
March 31, 2000 March 26, 1999
Net sales $ 372,466 $ 332,047
Cost of sales 211,840 186,150
------------- -------------
Gross profit 160,626 145,897
Operating expenses:
Selling and distribution 110,976 93,169
General and administrative 30,800 24,873
Non-recurring expenses 0 1,814
Loss on impairment of
long lived assets 3,881 0
------------- -------------
Operating (loss) income 14,969 26,041
Other income 2,613 3,617
Interest expense (954) (50)
------------- -------------
(Loss) income before
income taxes 16,628 29,608
Income tax provision
(benefit) 6,819 11,843
------------- -------------
Net (loss) income $ 9,809 $ 17,765
============= =============
Earnings (loss) per share:
Basic $ 0.62 $ 1.06
============= =============
Diluted $ 0.62 $ 1.05
============= =============
Weighted average shares
outstanding:
Basic 15,899,000 16,784,000
============= =============
Diluted 15,917,000 16,913,000
============= =============