POMONA, Calif., June 3, 2005 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today reported results for its fourth quarter and fiscal year ended April 1, 2005.
Net income for the fiscal fourth quarter was $3.8 million, or $0.24 per diluted share, compared with $6.3 million, or $0.41 per diluted share, a year ago. Net sales for the fiscal fourth quarter increased 8.9 percent to a record $152.5 million compared with $140.0 million last year. For the full fiscal year, net income was $14.3 million, or $0.90 per diluted share, compared with $17.7 million, or $1.16 per diluted share, a year earlier. Net sales for the fiscal year climbed 11.3 percent to $557.7 million from $501.1 million in fiscal 2004. Same store sales growth for the fourth quarter and fiscal year were 7.6% and 6.4%, respectively.
Results for the fourth quarter and the fiscal year were negatively impacted by a number of factors. Lease expense of approximately $1.2 million was booked as a result of a SFAS No. 13 adjustment which requires straight-line lease expense over the term of a lease when a lease contains fixed escalation clauses. Of this amount, $900,000 is related to prior fiscal years. As previously announced, the company wrote off $700,000 of wheel inventory in the quarter in addition to the $600,000 write-off during the third fiscal quarter. Additional expenses included Sarbanes-Oxley compliance costs of $350,000 for the quarter and $565,000 for the year. As a result of the company's Sarbanes-Oxley compliance efforts, the company wrote-off fixed assets in the amount of $324,000 in the quarter and $439,000 for the year that were no longer in service and increased its new computer system depreciation expense by $400,000. Other expenses totaling approximately $850,000 which were booked in the fourth quarter were accounts receivable write-offs, the pending sale of the Tijuana, Mexico facility, a sales tax audit and the accrual of additional fuel costs and performance bonuses.
The company also noted that fuel expenses in the fourth quarter were $700,000 higher compared with the same quarter a year earlier and $2.2 million higher for the full fiscal year.
"Fiscal 2005 was a transition year for the company. With that behind us, we are moving forward with enthusiasm. The market dynamics of the aftermarket collision replacement parts business remain strong and we have worked diligently this year to position Keystone to take full advantage of the anticipated growth which will come from greater use of aftermarket parts in the repair of damaged vehicles. Body shops and insurance companies continue to seek alternative products for automotive collision repair and Keystone's reputation and distribution network are major competitive strengths in this industry," said Richard L. Keister, president and chief executive officer.
"In the latter half of fiscal 2005, we put a lot of effort into making certain that our inside and outside sales representatives, General Managers, Regional Managers, Financial Staff and the Executive Team were all in alignment and committed to increasing the leverage of Keystone's market position as the leader in the industry for fiscal 2006 and beyond.
"While the year-over-year profit numbers do not show improvement due primarily to the factors discussed above, I'm very proud of what we accomplished this past year and extremely optimistic about our future," Keister said.
He indicated that management is focusing on several key initiatives in fiscal 2006, including improving inventory turns, enhancing the fulfillment rate to our customers, improved gross margins and achieving a high, single-digit organic growth rate. "Our focus in fiscal 2006 is on expanding the business and significantly improving the company's operating leverage. Further, we are now prepared as a team to continue our growth through acquisitions," Keister added.
He added that Keystone converted 61 locations to its new enterprise management systems during fiscal 2005. "With the exception of our acquisition in Maine and the company's Canadian operations, all of our locations are now on a common system. We will continue to fine-tune and develop the system to maximize its utility. In addition, we are currently working on new IT initiatives which will add value to our business -- including a B2B solution for the collision repair industry," Keister noted.
Keister also noted that in April 2005, the Company began selling the headlights for the Ford Taurus and Pontiac Grand Am which it had discontinued selling in September 2004. "We have documented that these lights meet federal standards as tested by an independent laboratory also used by NHTSA. While several insurance companies continue to suspend the use of aftermarket lighting products, the lighting manufacturers and CAPA are working together to allow CAPA certification of the most popular lighting products. The Company is optimistic that CAPA certified lights will be introduced into the market place before the end of the current fiscal year and that insurance companies will again specify aftermarket lighting in the repair of vehicles," Keister added.
The Company noted that its independent registered public accounting firm had not completed its audit of the Company's internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002. This is expected to occur at the time of the filing of the company's annual report on Form 10-K with the SEC. While the Company does not believe that it has any material weaknesses in its internal controls, until the auditors complete their work no assurances can be given.
Separately, the company announced it is scheduled to make a presentation at Sidoti & Company's Second Annual Boston Emerging Growth Institutional Investor Forum in Boston at the Ritz-Carlton Boston Common on Monday, June 6, 2005 at 9:40 a.m. Eastern time. John M. Palumbo, Keystone's chief financial officer, will review industry trends, as well as the company's business and growth opportunities.
Teleconference and Web Cast
Richard L. Keister, president and chief executive officer, and John M. Palumbo, chief financial officer, will host an investor conference call today at 11:00 a.m. Pacific Time to discuss the company's financial results and operations for the fiscal year. The call will be open to all interested investors either through a live audio Web broadcast via the Internet at www.keystone-auto.com and www.vcall.com, or live by calling (877) 440-9648 with call ID number 6606168. For those who are not available to listen to the live broadcast, the call will be archived for two weeks on both Web sites. A telephone playback of the conference call will also be available from 2:00 p.m. PDT Friday, June 3 through midnight Wednesday, June 8 by calling (800) 642-1687 (domestic) or (706) 645-9291 (international) and using access code: 6606168.
About Keystone
Keystone Automotive Industries, Inc. distributes its products primarily to collision repair shops through its 129 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 comprise more than 19,000 stock keeping units that 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 ability to achieve the initiatives in place for fiscal 2006, the impact of increased competition and the aggressive actions being taken by certain car manufacturers to negatively impact the aftermarket collision replacement parts industry, 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. Reference is also made to the Cautionary Statements set forth in the company's Form 10-K Annual Report filed with the Securities and Exchange Commission (SEC) on June 9, 2004 and in Part II, Item 5 of its Form 10-Qs filed with the SEC thereafter for additional 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 STATEMENTS OF INCOME
(In thousands, except for share and per share data)
Thirteen Thirteen Fifty-three Fifty-two
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
April 1, March 26, April 1, March 26,
2005 2004 2005 2004
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited)
Net Sales $ 152,549 $ 140,068 $ 557,705 $ 501,108
Cost of Sales 85,664 78,400 314,792 282,079
------------ ------------ ------------ ------------
Gross Profit 66,885 61,668 242,913 219,029
Operating
Expenses:
Selling &
Distribution 46,242 40,570 167,721 148,371
General &
Administrative 15,089 11,313 54,258 43,333
------------ ------------ ------------ ------------
Operating
Income 5,554 9,785 20,934 27,325
Other Income 779 557 2,881 2,235
Interest
Expense (43) (143) (259) (671)
------------ ------------ ------------ ------------
Income Before
Income Taxes 6,290 10,199 23,556 28,889
Income Taxes 2,486 3,851 9,296 11,167
------------ ------------ ------------ ------------
Net Income $ 3,804 $ 6,348 $ 14,260 $ 17,722
============ ============ ============ ============
Per Common
Share Income
Basic: $ 0.24 $ 0.42 $ 0.91 $ 1.18
============ ============ ============ ============
Diluted: $ 0.24 $ 0.41 $ 0.90 $ 1.16
============ ============ ============ ============
Weighted
average common
shares
outstanding:
Basic: 15,782,000 15,282,000 15,642,000 14,998,000
============ ============ ============ ============
Diluted: 15,915,000 15,618,000 15,787,000 15,266,000
============ ============ ============ ============
KEYSTONE AUTOMOTIVE INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
April 1, March 26,
2005 2004
------------ ------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash
equivalents $ 4,054 $ 3,176
Accounts receivable, net
of allowance of $1,270
at April 2005 and $887
at March 2004 49,719 44,005
Inventories, primarily
finished goods 119,679 107,221
Other current assets 12,018 11,532
------------ ------------
Total current assets 185,470 165,934
Plant, property and
equipment, net 31,079 30,652
Goodwill 11,309 9,662
Other intangibles, net of
accumulated amortization
of $3,851 at April 2005
and $3,565 at March 2004 925 1,323
Other assets 5,801 8,342
------------ ------------
Total assets $ 234,584 $ 215,913
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Credit facility $ -- $ 10,000
Accounts payable 25,950 18,598
Accrued liabilities 14,273 14,477
------------ ------------
Total current
liabilities 40,223 43,075
Other long-term
liabilities 2,583 1,311
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 15,839,000 at
April 2005 and
15,443,000 at March
2004, at stated value 93,244 89,492
Restricted Stock 460 180
Additional paid-in
capital 7,696 5,967
Retained earnings 91,101 76,841
Accumulated other
comprehensive loss (723) (953)
------------ ------------
Total shareholders'
equity 191,778 171,527
------------ ------------
Total liabilities and
shareholders' equity $ 234,584 $ 215,913
============ ============