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Letter to the Editor
Monday August 15
Keystone Automotive Industries Reports Record Sales for Q1 2006
Keystone Automotive Industries, Inc. has reported record sales for its fiscal 2006 first quarter ended July 1, 2005. Net sales for the 13-week 2006 fiscal quarter reached a record $144.8 million compared with $141.1 million last year-- an increase of 2.6 percent. After adjusting for an additional week in the same quarter a year earlier, the increase was 10.5 percent.Net income for the fiscal first quarter climbed 34.5 percent to $4.7 million, or $0.30 per diluted share, from $3.5 million, or $0.22 per diluted share, a year ago. Prior-year results were restated to include an expense of $897,000 as a result of the SFAS No. 13 lease expense adjustment. Excluding the SFAS No. 13 adjustment, prior-year net income as originally reported was $0.26 per diluted share, 15.4 percent higher than the restated results.
"Overall results for the quarter slightly exceeded our internal expectations. With the exception of lighting, we experienced strong sales momentum in our core product categories. Same store sales growth of 9.5 percent (after adjusting for the additional week in the prior-year period) is the strongest we have seen in several quarters and I believe validates our short-term strategy of having enough inventory available to service customers as we address our supply chain reengineering. I am also pleased to report that our two largest headlight suppliers and CAPA, an independent certifying agency, have agreed on procedures to begin certification. We believe that light applications, although limited, will be available during the second half of this year," said Richard L. Keister, president and chief executive officer.
Gross margin for the first quarter was 44.3 percent compared with 43.4 percent last year. The gross margin improvement is the result of pricing and improved mix.
Keystone has now completed the company's domestic enterprise system rollout.
"With the domestic portion of this project now behind us, we can concentrate on opportunities to leverage the company's expanding distribution network by strengthening our inventory systems, processes and improving and enhancing IT systems," Keister said.
Keister noted that during the quarter Keystone added to its distribution capabilities in Missouri with the completion of a small acquisition in Southwest Missouri. The company is continuing to seek additional acquisitions.
Keystone Automotive Industries, Inc. distributes its products primarily to collision repair shops through its 129 distribution facilities, of which 22 serve as regional hubs, located in 38 states and Canada.
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