Keystone Automotive Operations, Inc. Reports First Quarter Fiscal 2010 Results

EXETER, Pa., May 18 /PRNewswire/ -- Keystone Automotive Operations, Inc., a leading distributor and marketer of automotive aftermarket accessories and equipment in North America, today announced financial results for the first quarter of fiscal year 2010 ended April 3, 2010.  Highlights include:

• For the first quarter ended April 3, 2010, net sales were $122.0 million, an increase of $2.3 million, or 1.9%, compared to $119.7 million for the same period in the prior year.  The increase represents the Company's first quarterly year-over-year increase in more than two years.  It also comes amidst an economy that continues to suffer from a combination of factors, including high levels of unemployment, which impacts the business.

• Gross profit for the quarter was $38.8 million, a decrease of $1.0 million, or 2.5%, for the same period in the prior year.  Gross margin was 31.8% for the three month period ended April 3, 2010 as compared to 33.2% for the three month period ended April 4, 2009.  The decreases resulted from slightly lower selling margins and the timing of expenditures associated with advertising and marketing programs in support of our various vendor programs.

• Income from operations for the first quarter of fiscal 2010 was $0.6 million compared to a loss from operations of $1.1 million for the same period in the prior year.  This improvement was primarily attributable to a $2.5 million decrease in selling, general and administrative expenses, partially offset by the decrease in gross profit.  The decrease in selling, general and administrative expenses resulted primarily from a $1.3 million decrease in employee-related expense resulting from cost reduction programs initiated in 2009 in the delivery, warehouse and selling areas, and by a decrease in bad debt expense.

• The Company recorded a net loss of $6.4 million for the three months ended April 3, 2010, versus a net loss of $5.4 million for the same period in the prior year.  The increased net loss was primarily attributable to a $3.1 million reduction in income tax benefit, partially offset by the $1.7 million improvement in income from operations and a $0.4 million decrease in interest expense.

• Net cash provided by operating activities during the three months ended April 3, 2010 was $16.3 million compared to net cash provided by operating activities of $29.3 million for the three months ended April 4, 2009.  The decrease was driven by a smaller reduction in the levels of net operating assets employed in the business than the prior year period, partially offset by a decrease in net loss after adjustment for non-cash charges.

• Working capital totaled approximately $124.8 million at April 3, 2010, down slightly from $127.4 million at January 2, 2010.  The reduction resulted primarily from an increase in trade accounts payable and accrued liabilities and from a decrease in inventories, partially offset by increases in cash and trade accounts receivable.  

• As of April 3, 2010, the Company had a cash balance of $41.0 million and an additional $38.5 million of borrowing availability under its revolving credit facility.

"We are pleased to report a sales increase this quarter, our first in two years, which is a reflection of recent positive momentum in the automobile industry and our continued focus on geographic expansion and enhanced customer service," said Ed Orzetti, Chief Executive Officer of Keystone Automotive Operations, Inc.  "However, we continue to operate the business conservatively in these challenging economic times as we expect any recovery in the automotive aftermarket accessories and equipment industry to be modest and gradual.  We remain focused on leveraging our geographic footprint to serve customers efficiently, on cost management across our operations, and on continuing to explore business expansion opportunities."

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Conference Call Details

Keystone will hold a conference call to discuss the financial results for the first quarter ended April 3, 2010 on May 19, 2010, at 11:00 a.m. EDT.  To participate, please dial in to the conference call at (866) 509-8636, access code 76200035.  The conference call topic is "Keystone Automotive Operations, Inc. First Quarter Earnings Conference Call".

A telephone replay of the call will be available from 12:30 p.m. EDT on May 19, 2010 until 11:59 p.m. EDT on May 26, 2010.  The replay of the call may be accessed by dialing (800) 642-1687, access code 76200035.

About Keystone Automotive Operations, Inc.

Keystone Automotive Operations, Inc. (www. keystoneautomotive.com) is a leading distributor and marketer of automotive aftermarket accessories and equipment in North America, providing product lines to approximately 15,000 customers.  The Company operates four distribution centers and 24 non-inventory stocking cross-docks in the U.S. and Canada, as well as a fleet of over 300 trucks that provide multi-day per week delivery and returns covering 48 states and nine provinces of 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.

SOURCE Keystone Automotive Operations, Inc.