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Letter to the Editor

Keystone Automotive Industries Reports First Quarter Results; Net Income Up 44 Percent; Same Store Sales Up 5.3 Percent

POMONA, Calif. -- Keystone Automotive Industries, Inc. has reported that net income for its first fiscal quarter ended June 29, 2001 rose 44 percent to $2.1 million, or $0.15 per diluted share, from $1.5 million, or $0.10 per diluted share, a year ago. Net sales for the same period increased 5.7 percent to $91.5 million from $86.6 million a year earlier.

Net income per diluted share for the June 2001 quarter includes $0.02 resulting from Keystone's early adoption of SFAS No. 142. Under SFAS No. 142, effective March 31, 2001 Keystone will no longer amortize goodwill on its balance sheet and will immediately begin a review of all intangible assets for impairment.

Charles J. Hogarty, president and chief executive officer, said, "We are encouraged by the sales momentum that began during the second half of fiscal 2001 and its continuation through the first quarter of fiscal 2002, with same store sales increasing approximately 5.3 percent over the first quarter of last year.

"Keystone's sales increase reflects the return of some insurers to the use of certain aftermarket collision replacement parts. The return of these insurers highlights the economic value realized through a competitive free market and the related reductions in collision repair costs through the utilization of our products. The benefits from reducing the potential for an OEM collision parts monopoly are felt at all levels of the vehicle repair process. The consumer benefits through lower auto insurance premiums and lower costs for replacement parts for non-insured repairs. Insurance companies benefit through reduced claims costs. Collision repair shops benefit through an increase in the number of repairable vehicles."

Hogarty emphasized Keystone's commitment to providing the highest quality replacement parts to the collision repair industry. "We have demonstrated this commitment on a number of levels, including last year's introduction of the Keystone Platinum Plus brand of products and our focus on becoming ISO 9002 certified during this fiscal year. Both of these efforts, while expensive and time-consuming, have long-term benefits for the company. Subsequent to the end of the quarter, we completed an acquisition of AfterCrash in Baton Rouge, Louisiana. This acquisition complements our existing operations in Louisiana and will allow the company to expand AfterCrash's product line. We continue to evaluate acquisition opportunities to which would support our growth strategy," he said.

Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 113 distribution facilities, of which 21 serve as regional hubs. Its product lines consist of automotive body parts, bumpers, auto glass and remanufactured alloy wheels, as well as paint and other materials used in repairing a damaged vehicle. These products comprise more than 19,000 stock keeping units that are sold to more than 25,000 repair shops throughout the nation.

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