Keystone Automotive Operations, Inc. Reports First Quarter 2006 Results

Keystone Automotive Operations, Inc. Reports First Quarter 2006 Results

EXETER, Pa., May 16 /PRNewswire/ -- Keystone Automotive Operations, Inc., the largest distributor and marketer of specialty automotive accessories in North America, today announced financial results for the first quarter ended April 1, 2006. Highlights include:

* Net sales for the first quarter ended April 1, 2006 were $158.2 million, an increase of $38.3 million, or 32.0%, 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 our developing markets and higher sales to existing customers.

* Gross profit for the first quarter ended April 1, 2006 was $51.4 million, or 32.5% as a percentage of sales, as compared to $40.6 million, or 33.9% 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 ended April 1, 2006 was $9.2 million, an increase of $1.0 million, or 11.6%, 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 former President and Chief Executive Officer.

* Net income for the first quarter ended April 1, 2006 was $0.5 million compared to $1.1 million for the same period last year.

* As of April 1, 2006 the Company had a cash and cash equivalents balance of $10.0 million. The company's net debt (total debt less cash) at the end of the first quarter was $348.0 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."

[code] Summary Financials (Unaudited)

Summary Income Statement
($ in millions)
Three Months Ended Three Months Ended
April 2, 2005 April 1, 2006
Net sales $119.9 $158.2
Gross margin 40.6 51.4
Operating income 8.2 9.2
Net income (loss) 1.1 0.5



Summary Balance Sheet
($ in millions)
As of December 31, 2005 As of April 1, 2006
Assets
Current assets $184.4 $202.0
Property, plant and equipment, net 51.9 52.2
Other non-current assets 455.4 451.6
Total assets 691.7 705.8

Liabilities and Stockholders Equity
Current liabilities 90.6 105.6
Long-term debt 350.0 347.4
Other long-term liabilities 64.1 64.5
Total liabilities 504.7 517.5
Stockholders equity 187.0 188.3
Total liabilities and stockholders
equity 691.7 705.8[/code]


Conference Call Details

Keystone Automotive Operations will hold a live conference call to discuss first quarter 2006 financial results on May 23, 2006 at 11:00 a.m. EDT. To participate, please dial in to the conference call at (866) 600-0797, access code 8930352. The conference call topic is Keystone Automotive Operations Earnings Conference Call.

A telephone replay of the call will be available from 2:00 p.m. EDT on May 23, 2006 until 11:00 p.m. EDT on May 25, 2006. The replay of the call may be accessed by dialing (800) 642-1687, access code 8930352.

About Keystone Automotive Operations

Keystone Automotive Operations, Inc. (http://www.ekeystone.com/) is the largest distributor and marketer of specialty automotive accessories in North America, providing more than 800 product lines of automotive parts and accessories to approximately 16,000 wholesale customers. Keystone Automotive operates three distribution centers and 19 non-inventory stocking cross-docks in the U.S. and Canada, as well as a fleet of over 375 trucks that can provide next-day delivery to over 45 states and Canada.

Safe Harbor for Forward-Looking and Cautionary Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. As such, final results could differ from estimates or expectations due to risks and uncertainties, including but not limited to: incomplete or preliminary information; changes in government regulations and policies; continued acceptance of the Company's products and services in the marketplace; competitive factors; technological changes; the Company's dependence upon third-party suppliers; and other risks. For any of these factors, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended.

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