EXETER, Pa. — Keystone Automotive Operations has announced financial results for the second quarter of fiscal year 2009 ended July 4.
Sales for the second quarter were $129.6 million, a decrease of $36.2 million, or 21.8 percent, compared to $165.8 million for the second quarter in the prior year. The decrease in sales was driven by a combination of factors, including a decrease in consumer spending due to the general economic recession, a year-over-year decline in truck and SUV sales, and a reduction of available credit in the marketplace.
Gross profit for the second quarter of fiscal 2009 was $39.5 million, a decrease of $12.8 million, or 24.5 percent, from the same period in the prior year. Gross margin was 30.5 percent, down from 31.5 percent in the second quarter of the prior fiscal year.
Operating income for the second quarter of fiscal 2009 was $1.4 million, a decrease of $8.3 million compared to $9.7 million of operating income for the same period in the prior year. The decrease was attributable to the decline in sales and gross margin, partially offset by a decrease in operating expenses. The expense reductions came from efficiencies in sales, warehouse and delivery operations, and from a $1.9 million decrease in fuel costs, partially offset by slightly higher expenses in other general and administrative areas.
Net loss for the second quarter of fiscal 2009 was $3.4 million, versus net income of $1.3 million for the same period in the prior year. The higher net loss resulted from the previously-mentioned $12.8 million decrease in gross profit and from a $0.2 million decrease in other income and sale of property, plant and equipment. These decreases were partially offset by a $4.6 million decrease in selling, general and administrative expenses, a $1 million decrease in interest expense, and a $2.7 million increase in income tax benefits.
As of July 4, the company had a cash balance of $54.9 million and an additional $36.7 million of borrowing capacity under its revolving credit facility.
"While the macroeconomic environment is challenging and the automobile industry remains under pressure, we are encouraged by the long-term growth potential created by our strong market position in the automotive aftermarket accessories industry," said Ed Orzetti, chief executive officer of Keystone Automotive Operations. "Our strong liquidity position has allowed us to continue to invest in the business even in these difficult times. Last year we acquired the assets of Arrow Speed Warehouse, and we have added several cross-docks allowing us to serve new customers in new geographic areas. We also continue to improve our productivity processes, and support and promotion of our vendors’ products, which in turn positively impacts customer service. Once the economy and, particularly the automotive industry recover, we expect to be well-positioned to grow our business."
