EXETER, Pa. — Keystone Automotive Operations has announced financial results for its fiscal second quarter ended June 28.
Net sales for the second quarter 2008 were $165.8 million, a decrease of $6.8 million, or 3.9 percent, compared to $172.6 million for the same period in 2007. The decrease in sales, which fell mostly in the last month of the quarter, was driven by a combination of factors, including a decrease in consumer spending on discretionary items driven by higher gasoline prices, general economic uncertainty, and a year-over-year decline in truck and SUV sales.
Gross profit for the second quarter was $52.3 million versus $52.6 million for the same period in the prior year, a decrease of $0.3 million, or 0.7 percent. Gross margin increased to 31.5 percent in the fiscal quarter ended June 28, an increase of approximately 1 percent compared to gross margin of 30.5 percent for the same period in 2007.
Operating income for the second quarter 2008 was $9.7 million, a decrease of $1 million compared to $10.7 million for the same period in the prior year. The decrease was attributable to lower sales and an increase in operating expenses, driven primarily by higher delivery expenses and general inflation, which were partially offset by the improvement in gross margin.
Keystone Automotive Operations recorded net income of $1.3 million in the second quarter ended June 28, versus a net income of $0.8 million for the same period in 2007. The improvement in net income resulted from a $1.3 million decrease in interest expense and a $0.3 million increase in other income, partially offset by a $0.3 million decrease in gross profit, the $0.8 million increase in selling, general and administrative expense and a $0.1 million increase in income tax expense.
As of June 28, Keystone Automotive Operations had a cash balance of $1.6 million. The net debt (total debt less cash) at the end of the second quarter was $369 million compared to $370.1 million for the same period in the prior year.
"Given the overall industry sentiment and general economic environment, we are pleased to report an increase in gross margin and net income," said Ed Orzetti, chief executive officer of Keystone Automotive Operations. "We believe our second quarter performance versus overall industry trends indicates Keystone is gaining in market share driven by outstanding customer service and superior inventory availability. We remain focused on operating the company in a prudent manner during these challenging times and also on building our business for the long-term through continued market share gains and, where available, attractively-priced acquisitions, joint ventures or asset purchases from competitors more challenged by market conditions."
For more information about Keystone Automotive Operations, visit: www.ekeystone.com.
