Keystone Automotive Industries Reports First Quarter Results

From Primezone Media Network

POMONA, CA — Keystone Automotive Industries, Inc. has reported record earnings and sales for its fiscal 2008 first quarter ended June 29 supported by ongoing industry demand for generic automotive replacement parts and management’s continued focus on operating leverage.

Net income for the fiscal first quarter climbed 20.8 percent to $7.4 million, or 44 cents per diluted share, from $6.1 million, or 37 cents per diluted share, a year ago. Operating income increased 15.2 percent to $11.6 million from $10 million a year ago, reflecting continued sales growth and operating leverage. Operating margin was 6.4 percent compared with 6 percent a year earlier. Net sales for the fiscal first quarter climbed 7.8 percent to $180.7 million from $167.7 million last year. Same store sales growth for the first quarter was 6.6 percent.

Gross margin for the fiscal first quarter was 45 percent compared with 44.2 percent last year, reflecting continued improvement in gross margin offset by additional cross-dock expense of approximately $300,000 as the company continues the rollout of its cross-dock initiative. The company opened its sixth cross-dock operation during the quarter at its Linthicum, MD, location.

"The company’s solid performance for the quarter reflects continued benefits derived from our team’s focus on parts availability throughout the network and the continued implementation of strategic initiatives to support these efforts," said Rick Keister, president and chief executive officer.

He noted that the company’s start-up bumper remanufacturing operation in Mexico continues to proceed on schedule. Keister added that the operation generated an after-tax profit of approximately $137,000 for the first time since its establishment last year.

Keister indicated that lights, bumpers and crash parts contributed 68.4 percent of total sales for the fiscal first quarter, with bumper sales increasing 12.4 percent and light sales climbing 10.5 percent compared with the same period a year earlier.

As recently announced, the company has signed a definitive merger agreement with LKQ Corporation in which LKQ will acquire all of the outstanding shares of Keystone. The merger is subject to the approval of Keystone’s shareholders, regulatory approvals and other customary conditions. It is expected to close early in the fourth quarter of calendar 2007. In light of the pending merger agreement, Keystone will not host an investor conference call in conjunction with the release of its fiscal 2008 first quarter results.