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

EXETER, Pa., Aug. 11 /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 second quarter of fiscal year 2010 ended July 3, 2010.  Highlights include:

• Net sales in the second quarter of fiscal 2010 were $137.0 million, an increase of $7.4 million, or 5.7%, compared to $129.6 million for the same period in the prior year, driven primarily by volume increases.  These increases were achieved despite the ongoing economic recession, including continued elevated levels of unemployment.

• Gross profit for the second quarter was $44.2 million, an increase of $4.4 million, or 10.9%, over the same period in the prior year.  Gross margin was 32.3% for the three month period ended July 3, 2010, an increase versus 30.7% for the three month period ended July 4, 2009.  These increases were primarily attributable to higher sales volumes and improved product sales mix.

• Income from operations for the second quarter of fiscal year 2010 was $6.0 million compared to $1.4 million for the same period in the prior year.  This improvement was primarily attributable to the gross profit increase previously mentioned.

• The Company recorded a net loss of $0.9 million for the three months ended July 3, 2010, versus a net loss of $3.4 million for the same period in the prior year.  The decreased net loss was primarily attributable to a $4.6 million improvement in income from operations, partially offset by a reduced income tax benefit in the amount of $2.3 million.

• As of July 3, 2010, the Company had a cash balance of $41.5 million and an additional $41.2 million of borrowing capacity under its revolving credit facility.

• Working capital totaled $127.7 million at July 3, 2010, up slightly from $127.4 million at January 2, 2010.

• Net cash provided by operating activities for the six months ended July 3, 2010 was $18.2 million compared to $30.8 million for the same period in the prior year.  The decrease in net cash provided by operating activities resulted primarily from higher accounts receivable and inventory levels, partially offset by higher accounts payable levels.  This decrease in cash for higher net operating assets employed in the business year-over-year was partially offset by a $6.0 million increase in net income adjusted for non-cash charges.

"We are pleased to report our second consecutive quarter of higher year-over-year sales as well as a year-over-year increase in gross margin, both of which we believe are a reflection of continued market share gains and an enhanced focus on product mix and marketing activities," said Ed Orzetti, Chief Executive Officer of Keystone Automotive Operations, Inc.  "Our financial position remains solid, with healthy cash, liquidity and working capital positions.  With U.S. unemployment continuing to hover close to 10 percent, a recovery in the automotive aftermarket accessories and equipment industry remains elusive.  However, our mission remains to support customers and vendors with programs that help them become more efficient and profitable."

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Conference Call Details

Keystone will hold a conference call to discuss the financial results for the second quarter ended July 3, 2010 on August 12, 2010, at 11:00 a.m. EDT. To participate, please dial in to the conference call at (866) 509-8636, access code 93146499. The conference call topic is "Keystone Automotive Operations, Inc. Second Quarter Earnings Conference Call".

A telephone replay of the call will be available from 12:30 p.m. EDT on August 12, 2010 until 11:59 p.m. EDT on August 19, 2010. The replay of the call may be accessed by dialing (800) 642-1687, access code 93146499.

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.