EXETER, PA — Keystone Automotive Operations, a marketer of specialty automotive accessories announced its financial results for the first quarter ended April 1.

Net sales for the first quarter ended April 1 were $158.2 million, an increase of $38.3 million, or 32 percent, as compared to $119.9 million for the same period in the prior year. The sales increase was driven primarily by the integration of Blacksmith Distributing and Reliable Automotive customers, further penetration in developing markets and higher sales to existing customers.

Gross profit for the first quarter was $51.4 million, or 32.5 percent as a percentage of sales, as compared to $40.6 million, or 33.9 percent as a percentage of sales for the same period in the prior year. This decrease was primarily driven by increased freight expense as a result of expanded geographic reach and the servicing of smaller customers due to the Reliable acquisition.

Operating income for the first quarter was $9.2 million, an increase of $1 million, or 11.6 percent, as compared to $8.2 million for the comparable period in 2005. The increase in operating income resulted primarily from higher net sales partially offset by lower gross margin percentages and an increase in selling, general and administrative expenses which included $0.9 million of non-cash stock-based compensation related to the retirement of the company’s former president and chief executive officer.

Net income for the first quarter was $0.5 million compared to $1.1 million for the same period last year.

As of April 1 the company had a cash and cash equivalents balance of $10 million. The company’s net debt (total debt less cash) at the end of the first quarter was $348 million.

“In a challenging environment, we continued to grow sales and profitability, successfully integrate Reliable Automotive and more effectively leverage our existing infrastructure,” said Ed Orzetti, chief executive officer of Keystone Automotive Operations. “With much of the operational complexity behind us, the benefits of combining Keystone and Reliable are being realized. Our customers and vendors are seeing more and better products and promotional programs and enhanced service including direct delivery with greater frequency in certain target markets.”

For more information about Keystone Automotive Operations, Inc., go to: ekeystone.com .

_______________________________________

Click here to view the rest of today’s headlines.