EXETER, PA — Keystone Automotive Operations has announced financial results for the year ended Dec. 30, 2006.

For the fiscal year ended Dec. 30, 2006, sales were $618.7 million, an increase of $109.6 million, or 21.5 percent, compared to $509.1 million in the prior year. Gross profit for the fiscal year was $197.4 million, a 19.1 percent increase over the prior year’s $165.8 million. Gross margin decreased to 31.9 percent from 32.6 percent in the prior year, due primarily to lower product selling margin.

Operating income for the current year was $33.4 million, an increase of $3.7 million, or 12.4 percent, compared to $29.7 million in the prior year. The company said operating income growth was hampered by investments made to leverage its existing infrastructure, such as a new distribution center in the southeastern United States and a new cross-dock in Minnesota; additional delivery runs to better serve an expanded customer base; and the decrease in gross margin noted above. Higher interest expense for the year contributed to a full year net loss of $(0.1) million, versus net income of $1.8 million in the prior year.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the fiscal year was $53.9 million, an increase of 10.2 percent, or $5 million, over the prior year. At the end of 2006 the company had net debt of $371.7 million (net of cash and cash equivalents of $2.7 million.)

Net sales for the fourth quarter ended December 30, 2006 were $138.7 million, an increase of $19.8 million, or 16.6 percent, compared to $118.9 million in the prior year. The sales increase was driven primarily by the acquisition of Reliable Automotive in December 2005 and further penetration in our developing markets. Gross profit for the fourth quarter ended December 30, 2006 was $42.3 million versus $38.6 million in the prior year, an increase of 9.6 percent. Gross margin declined to 30.5 percent in this year’s fourth quarter from 32.4 percent in the prior year, driven primarily by lower product selling margin.

Operating income for the fourth quarter was $0.4 million, a decrease of $3.1 million compared to $3.5 million in the prior year. The company recorded a net loss of $4.3 million in the fourth quarter ended December 30, 2006 versus a loss of $2.5 million in the previous year’s fourth quarter, driven primarily by the decrease in operating income and incremental interest expense related to the financing for the Reliable acquisition. These decreases were partially offset by income tax benefits.

EBITDA for the fourth quarter was $5.4 million, a decrease of $2.9 million versus the prior year.

"Keystone made great strides during the year as we focused on expanding and better serving our customer base," said Ed Orzetti, the company’s chief executive officer. "Significant accomplishments included opening a new distribution center in Georgia, beginning the process of consolidating two nearby warehouses into one new facility in southern California, and adding new truck routes in previously underserved regions. We’re increasing our efficiency while simultaneously striving to be the best partner possible to our valued customers and vendors. Despite some challenging headwinds in the industry, Keystone maintains a strong competitive position and is well- positioned for the future."

For more information about Keystone Automotive Operations, go to: http://www.ekeystone.com.