Keystone Automotive Industries Reports Record Fiscal Third Quarter 2003 Results

Net Income Up 29 Percent for Quarter; Sales Climb 15.3 Percent


POMONA, Calif., Jan. 30, 2003 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported record results for its third quarter ended December 27, 2002, reflecting continued momentum in its aftermarket collision parts business.

Net income for the third quarter climbed 29.0 percent to $3.6 million, or $0.24 per diluted share, from $2.8 million, or $0.19 per diluted share, a year ago. Operating income for the same period climbed 27.6 percent to $5.7 million compared with $4.4 million a year earlier. Net sales for the third quarter increased 15.3 percent to $108.5 million from $94.1 million last year.

For the nine months, net sales rose 15.3 percent to $316.4 million from $274.4 million a year ago. Net income for the same period was $9.8 million, or $0.65 per diluted share, compared with a net loss of $26.2 million, or $1.77 per diluted share, a year earlier, which included the cumulative effect of a change in accounting principle, made retroactive to the first quarter of fiscal 2002, as a result of the early adoption of Statement of Financial Accounting Standards (SFAS No.142) "Goodwill and Other Intangible Assets." Operating income for the nine-month period increased more than four-fold to $15.4 million from $3.5 million a year earlier.

"Operating results for the third fiscal quarter represent the eighth year-over-year increase in quarterly operating performance for Keystone," said Charles J. Hogarty, president and chief executive officer.

He cited several factors that continue to have a positive impact on Keystone's financial performance, including more frequent specification of aftermarket parts by certain insurance companies and expanding market acceptance of Keystone's Platinum Plus private label products.

Hogarty noted that same store sales for the third quarter and nine-month period increased approximately nine percent compared with a year ago. Gross margins for the third quarter were 43.8 percent compared with 43.2 percent for the same period in 2001, as a result of better product mix and pricing. The increase in inventory levels, compared with fiscal 2002 year end, reflects an inventory build-up to support the company's business given the pending West Coast port closure last year, which was subsequently settled, and the anticipated increased sales activity, along with inventory from acquisitions.

He highlighted Keystone's continuing strategy to strengthen its distribution capabilities, citing several acquisitions made in the last fiscal quarter of 2002 and the opening of four Greenfield operations. Subsequent to the end of the third fiscal quarter of 2003, the company completed an acquisition of Advance Bumper and Body Parts of Springfield, Missouri.

It is Keystone's understanding that the major parties to a pending class action lawsuit against Erie Insurance Company for specifying aftermarket collision replacement parts, in which Keystone is an additional defendant, have reached an agreement in principle to settle the case. The settlement as proposed would result in the dismissal of all claims against Keystone without cost to the company.

Separately, the company said that Kim D. Wood, a vice president of Keystone, has left the company to pursue other interests.

Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 114 distribution facilities, of which 21 serve as regional hubs, located in 37 states, Vancouver, Canada and Tijuana, Mexico. 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 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 as a result of (i) the cost, time and potential disruption of operations relating to the implementation of a new enterprise management information system which began in July 2002; (ii) the continuing impact of the verdict in the State Farm Mutual Automobile Insurance Company class action, which is on appeal; (iii) Keystone being named as defendant in an action by General Motors challenging the alleged use of certain of its trade marks; and (iv) the uncertainty involved in acquiring businesses and/or opening Greenfield operations. In addition, there can be no assurance that the momentum in sales and net income experienced during the last year 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 Form 10-K for the year ended March 29, 2002, on file with the Securities and Exchange Commission.



                 Keystone Automotive Industries, Inc.
            Condensed Consolidated Statements of Operations
          (In thousands, except share and per share amounts)
                              (Unaudited)


                       Thirteen    Thirteen    Twenty-six  Twenty-six
                     Weeks Ended  Weeks Ended  Weeks Ended Weeks Ended
                       Dec. 27,    Dec. 28,     Dec. 27,    Dec. 28,
                         2002        2001        2002         2001
                      ----------  ----------   ----------  ---------- 
                                                           (restated)

 Net sales            $  108,548  $   94,149   $  316,409  $  274,410
 Cost of sales            61,032      53,463      178,541     157,043
                      ----------  ----------   ----------  ---------- 
 Gross profit             47,516      40,686      137,868     117,367
 Operating expenses:
  Selling and
   distribution           32,117      27,800       94,285      83,344
  General and
   administrative          9,744       8,454       28,141      23,664
  Non-recurring               --          --           --       6,796
                      ----------  ----------   ----------  ---------- 
 Operating income          5,655       4,432       15,442        3,563
 Other income                454         411        1,280       1,419
 Interest expense           (117)       (117)        (381)       (550)
                      ----------  ----------   ----------  ---------- 
 Income before income
  taxes and
  cumulative effect
  of a change in
  accounting principle     5,992       4,726       16,341       4,432
 Income tax provision      2,397       1,938        6,536       1,908
                      ----------  ----------   ----------  ---------- 
 Income before
  cumulative effect
  of a change in
  accounting principle     3,595       2,788        9,805       2,524
 Cumulative effect of
  a change in
  accounting principle
  (net of tax of
  $4,835)                     --          --           --     (28,691)
                      ----------  ----------   ----------  ---------- 
 Net income (loss)    $    3,595  $    2,788   $    9,805  $  (26,167)
                      ==========  ==========   ==========  ========== 
 Per Common Share:
  Income before
   cumulative effect
   of a change in
   accounting
   principle:
    Basic             $     0.25  $     0.19   $     0.67  $     0.17
    Diluted           $     0.24  $     0.19   $     0.65  $     0.17
  Cumulative effect
   of a change in
   accounting
   principle (net of
   tax):
    Basic             $       --  $       --   $       --  $    (1.99)
    Diluted           $       --  $       --   $       --  $    (1.94)
  Net income (loss)
   per share:
    Basic             $     0.25  $     0.19   $     0.67  $    (1.81)
                      ==========  ==========   ==========  ========== 
    Diluted           $     0.24  $     0.19   $     0.65  $    (1.77)
                      ==========  ==========   ==========  ========== 
  Weighted average
   common shares
   outstanding:
    Basic             14,649,000  14,369,000   14,623,000  14,442,000
                      ==========  ==========   ==========  ========== 
    Diluted           14,960,000  14,795,000   14,986,000  14,814,000
                      ==========  ==========   ==========  ========== 


                 Keystone Automotive Industries, Inc.
                 Condensed Consolidated Balance Sheets
                 (In thousands, except share amounts)

                                              December 27,   March 29,
                                                 2002          2002
                                               ---------    ---------
                 ASSETS                       (Unaudited)     (Note)
 Current Assets:
  Cash and cash equivalents                    $   2,529    $   3,652
  Accounts receivable, net of
   allowance of $1,596 at December
   2002 and $1,046 at March 2002                  36,585       33,524
  Inventories, primarily finished goods           98,822       81,503
  Other current assets                             6,615        8,090
                                               ---------    ---------
   Total current assets                          144,551      126,769

 Plant, property and equipment, net               22,868       19,344
 Goodwill                                          2,255        1,805
 Other intangibles, net of
  accumulated amortization of
  $2,970 at December 2002 and $2,755
  at March 2002                                    1,038        1,397
 Other assets                                     10,603       10,371
                                               ---------    ---------
   Total assets                                $ 181,315    $ 159,686
                                               =========    =========

       LIABILITIES AND SHAREHOLDERS' EQUITY

 Current Liabilities:
  Credit facility                              $  13,450    $   6,832
  Accounts payable                                21,236       14,589
  Accrued liabilities                              8,331        9,889
  Current portion of long-term debt                   22           75
                                               ---------    ---------
   Total current liabilities                      43,039       31,385

 Long-term debt, less
   current portion                                  --             14
 Other long-term liabilities                       1,528        1,973


 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
    14,655,000 at December 2002
    and 14,583,000 at March 2002                  81,013       80,383

   Warrant                                           236          236

  Additional paid-in capital                       1,864        1,864
  Retained earnings                               54,176       44,372
  Accumulated other comprehensive loss              (541)        (541)
                                               ---------    ---------
    Total shareholders' equity                   136,748      126,314
                                               ---------    ---------
    Total liabilities and shareholders'
     equity                                    $ 181,315    $ 159,686
                                               =========    =========

 NOTE: The balance sheet at March 29, 2002 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.


            

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