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Letter to the Editor
This article originally appeared in the March 2005 Issue of INSIGHT
©2005 Collision Repair Industry INSIGHT All Rights Reserved
Geralynn Kottschade to Chair NACE2005
CARSTAR Hires Three Collision Industry Veterans
Keystone Automotive Industries Reports Record Sales in Q3 But Income Down
U.S. Congress Passes Class Action Legislation
Boyd Group Acquires Auto Glass Repair Network
Copart Opens Two Facilities in Southeast
Ford Advocates CCAR S/P2 Training
UTI Purchases New England Campus in Norwood
Sherwin-Williams Reports 2004 Year-End Financial Results
BASF and Employees Donate $4.9 Million for Tsunami Relief
Janet Chaney to Chair NABC’s PRIDE Committee
INDUSTRY UPDATE
Geralynn Kottschade, AAM, co-owner of Jerry’s Body Shop, Mankato, Minn., has been named chairperson of the 2005 International Autobody Con-gress & Exposition (NACE).
Kottschade is the first woman to chair NACE and brings 22 years of collision repair experience to the position.
Jerry’s Body Shop has been in business for 33 years and has received the Minnesota Quality Service Award and the Mankato Area Quality Award. Kottschade has held several industry positions, including 2004 chairman of the international Automotive Service Association (ASA). She is an ASA member, as well as a member of the local Inter-Industry Conference on Auto Collision Repair (I-CAR) and the MACS School System. She served as treasurer and secretary of the Collision Industry Electronic Conference Association (CIECA), and has specialized training from AKZO, ADP and CCC. She earned her Accredited Automotive Manager (AAM) designation from the Automotive Management Institute (AMI) in 1996.
Her non-industry affiliations include membership in the Better Business Bureau, and she served in the U.S. National Guard from 1977-1982.
“I am very excited to serve as NACE chairman in 2005. I look forward to another successful show that will provide training, product introductions and networking to address the issues that face the collision industry,” said Kottschade.
NACE 2005 will be held Nov. 2-5, at the Mandalay Bay Convention Center in Las Vegas, Nevada, USA. The educational Conference will run from Nov. 2-5 (Wednesday-Saturday), and the Exposition will take place Nov. 3-5 (Thursday-Saturday).
The event will again be held during Automotive Aftermar-ket Industry Week (AAIW), taking place that same week in Las Vegas.
NACE, the world’s collision repair event, annually draws an attendance of 30,000+ from around the globe.
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CARSTAR, North America's largest collision repair organization, has hired three experienced industry veterans for key positions.
- Jeff Green has been named CARSTAR's Vice President of New Franchise Sales. In his new role with CARSTAR, Jeff will lead the franchise development team's aggressive expansion efforts, including the plan to add 100 stores to the CARSTAR system in targeted markets throughout the remainder of 2005.
Green comes to CARSTAR from a 23-year career with Sherwin-Williams. During the course of his tenure, Green held numerous positions in both marketing and sales, including national account management for CARSTAR and Sherwin-Williams' other large automotive clients. He was most recently Director of New Business Developmentfor Sherwin-Williams.
- Stacy Bartnik has joined CARSTAR in the newly created strategic role of Director of Franchise Services. Bartnik will provide support and guidance to CARSTAR franchisees in the Chicagoland area. Previously, Bartnik was a consultant in the collision repair industry with Carter and Carter International.
Bartnik is a frequent contributing editor to Automotive Body Repair News and she has held leadership roles in many industry associations, including the National Auto Body Council and the Society of Collision Repair Specialists.
- Sheryl Mateson has been hired as a Regional Service Manager for CARSTAR. Mateson has a diverse background in the collision repair industry, including stints as Vice President of Operations for CCC Development Com-pany and Director of Product Management for Mitchell International.
Most recently, Mateson was an independent marketing consultant in the auto body industry and she will use her marketing and entrepreneurial skills to assist CARSTAR franchisees in Montana, Oregon, Utah and Washington.
"We are proud to continue our tradition of identifying the most talented individuals throughout our industry and then bringing them into the CARSTAR family," said Chief Administrative Officer Daren Fristoe. "The addition of these three industry professionals underscores our commitment to provide our franchisees with the kind of growth and support they have come to expect from our franchise system."
CARSTAR is North America's largest collision repair organization, with more than 350 locations across the United States and Canada.
Keystone Automotive Industries, Inc. has reported record sales for its fiscal third quarter ended December 31, 2004.
Net sales for the fiscal third quarter increased 8.2 percent to a record $136.6 million compared with $126.3 million last year. Net income for the fiscal third quarter was $4.0 million, or $0.25 per diluted share compared with $4.5 million, or $0.29 per diluted share, a year ago.
Net sales for the nine months increased 12.2 percent to $405.2 million from $361.0 million in fiscal 2004. For the nine months, net income was $10.5 million, or $0.66 per diluted share, compared with $11.4 million, or $0.75 per diluted share, a year earlier. The nine-month period in fiscal 2005 contained 40 weeks compared with 39 weeks in fiscal 2004.
"Record sales for the quarter reflect continued strength of Keystone's Platinum Plus private label product line as well as increased utilization of aftermarket collision replacement parts by the collision repair industry," said Richard L. Keister, president and chief executive officer.
He added that net income continues to be impacted by increases in selling, distribution and general administrative expenses over prior-year periods.
John Palumbo, Keystone's chief financial officer, indicated that sales of automotive body parts, including fenders, hoods, radiators, grilles, lights and other crash parts increased by 10.1 percent. Sales of new and recycled bumpers increased by 9.7 percent and sales of remanufactured wheels and related products climbed 8.5 percent over a year ago. These increases were offset primarily by decreases in sales of paint and related products.
Palumbo also noted that same store sales for the third quarter and nine-month period increased approximately six percent compared with a year ago, with an adjustment for the current fiscal nine-month period to reflect an additional week.
Gross margin for the third quarter was 43.8 percent compared with 44.0 percent last year. Impacting gross margin was a $600,000 reserve for excess and obsolete wheel inventories.
Keister highlighted Keystone's ongoing focus on leveraging the company's expanding distribution network and its acquisition during the quarter of Chambers Parts Distribution, headquartered in Manchester, Maine. The company continues to seek additional acquisitions.
"With the exception of our Canadian operations and the recent Chambers acquisition, we have completed our enterprise system rollout. However we still face significant work to refine and optimize the system to allow us to leverage the benefits," Keister said.
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.
The U.S. House of Representatives has passed the Class Action Fairness Act by a vote of 279-149.
The U.S. Senate passed the bill by a vote of 72-26 in early February. President Bush is expected to sign the legislation shortly.
The measure calls for moving many class-action lawsuits from state courts to federal courts when the amount in dispute exceeds $5 million and when the defendant and the plaintiff live in different states.
"We are pleased with the House's quick passage of this important legislation," said Bob Redding, the Automotive Service Association's (ASA) Washington, D.C., representative. "The association wants to thank all ASA members who contacted their U.S. Congressional representatives in support of class-action legislation."
The Boyd Group Income Fund has acquired the assets of the Glass Network Division of Globe-Amerada Glass Company.
The Globe Network is an auto glass repair and replacement referral business with affiliated service providers throughout the United States.
The Boyd Group will fund the acquisition through a combination of cash, Fund units, supplier loans and a five-year note held by the Globe-Amerada Glass Company
Annual revenues for the Globe Network were approximately $12.5 million for 2004. The acquisition is expected to make an immediate positive contribution to the Fund's distributable cash.
"This acquisition is an excellent strategic fit for us and represents a significant opportunity to increase our distributable cash going forward. We plan to integrate the Globe Network into our U.S. based Gerber Collision & Glass head office to realize cost synergies, while leveraging our strategic industry relationships to drive future growth," said Terry Smith, President and CEO of the Boyd Group. "We view auto glass repair and replacement services as a complementary growth driver for our business. Though we provide auto glass repair and replacement services in our Canadian locations as well as our Gerber Collision & Glass facilities in Illinois, we do not currently offer auto glass services in the balance of our U.S. locations. Through the Globe Network, we will refer network repairs to Boyd Group facilities, thereby providing us with an opportunity to quickly and profitably introduce auto glass repair and replacement services to the balance of our U.S. locations."
Founded in 1976, the Globe Network is the oldest auto glass repair and replacement referral network in the U.S. Utilizing a company-owned and operated call centre located in Chicago, Illinois, the Globe Network facilitates auto glass repair and replacement services across the U.S. through a network of independently owned businesses comprised of approximately 7,000 locations nationwide. The Globe Network targets insurance companies and the commercial (fleet leasing) segment of the auto glass industry.
Senior management of the Globe Network, including John Kellman, President, and Michael Kellman, Senior Vice President, have been retained by the Boyd Group to manage the Globe Network's activities and will report directly to Eddie Cheskis, CEO of Boyd Group's Gerber Collision & Glass division. Cheskis is the former President of the USA Glass Network.
"This acquisition provides us with tremendous upside," said Cheskis. "Combining the Globe Network's track record of outstanding customer service with Boyd and Gerber's strength in providing insurance companies with superior collision repair claims management solutions, post acquisition, we will embark on a focused growth plan, with a mandate to significantly grow the Globe Network's share of market."
Gerber Collision & Glass was acquired by Boyd Group in February 2004. In the second quarter of 2004, Boyd Group initiated the roll-out of Gerber Collision & Glass as its brand for all of its collision repair centres in the U.S. As Boyd Group continues to expand its network of Gerber Collision & Glass repair facilities in select regions throughout the U.S., it intends to grow its auto glass repair business proportionately.
The Boyd Group Inc. is the largest operator of collision repair facilities in Canada and among the largest in North America.
Copart, Inc., the largest provider of vehicle salvage disposition services in the United States, has opened its seventh salvage yard in the state of Florida, in Ocala, and its 20th in the Southeastern region, in Knoxville, Tennessee.
The 21-acre greenfield facility located in Ocala, Florida will add needed capacity in the northern part of the state, which is currently serviced by yards in Orlando, Jacksonville and Tampa, Florida.
"We are constantly challenged to handle the continuing growth while maintaining outstanding service to our insurance customers and salvage buyers. We are pleased that Copart has the financial, human and technological resources to address growth and to respond to our customers' needs," said Willis J. Johnson, Copart's Chief Executive Officer.
Copart also opened its second salvage facility in the state of Tennessee. The greenfield facility, located in Knoxville, will add needed capacity in the eastern part of the state, which is currently serviced by yards in Nashville, Tennessee; Lexington, Kentucky, and China Grove, North Carolina.
"Knoxville allows us to provide reduced towing costs to our suppliers and helps insure prompt pick up of vehicles in this region, as it is located between three existing facilities. We pride ourselves in having the largest network with the ability to pick up most vehicles within 24 hours of assignment. This helps reduce not only tow charges but storage charges for our suppliers and provides an important competitive advantage," commented Johnson.
Copart, founded in 1982, operates 110 facilities in the United States and Canada.
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The Ford Motor Company has advocated the Coordinat-ing Committee For Automotive Repair’s (CCAR) “S/P2” online training in Safety and Pollution Prevention to Ford and Lincoln-Mercury dealers across the United States.
“S/P2 is industry-recognized and recommended for dealership use as part of an overall environmental awareness plan,” said Al Rocker, Field Operations Manager / Technical Service Operations, Ford Customer Service Division. “Ford and Lincoln Mercury Dealers are encouraged to participate in the S/P2 training, which can play a valuable role in the important task of safety and environmental stewardship in both the collision repair and service repair departments.”
CCAR’s S/P2 is an Internet-based training that addresses key safety and pollution prevention issues for automotive repair professionals. It has been crafted to adhere to U.S. EPA and OSHA standards, which require that shop personnel be trained when they start work and at least annually on safety and environmental regulations.
“Ford is to be congratulated for its environmental focus on behalf of its more than 4,400 dealers across the United States,” said Lirel Holt, CCAR Chairman of the Board. “We look forward to an ongoing partnership with Ford Motor Company as we seek to make the world a cleaner and safer place for everyone, create a healthy workforce environment, and enhance the daily lives of all who work in the industry.”
S/P2 is also provided free of charge to automotive schools and training programs throughout the U.S. Currently, over 1,600 schools have access to the S/P2 courseware, representing a student audience of more than 130,000. S/P2 tracks technician/student progress through the training, grades tests and is constantly updated as changes occur in federal and state laws.
CCAR, a 501(c)(3) not-for-profit organization, also operates “CCAR-GreenLink(R),” the National Environmental Compliance Assistance Center for Automotive Repair, in cooperation with the U.S. Environmental Protection Agency (EPA).
Universal Technical Institute Inc. has completed the $12.4 million purchase of a 24.9-acre parcel in the Boston suburb of Norwood, Mass.
Phoenix-based UTI plans to house a new undergraduate automotive technician training campus on the property, company officials said. Additionally, UTI intends to invest an additional $11.9 million to retrofit the property's existing 222,000-square-foot building over the next several months.
The Norwood campus is expected to open in the fourth quarter of fiscal 2005, pending state and regulatory approval. At maturity, the campus will have approximately 1,900 students and provide approximately 170,000 square feet of classroom and lab space.
"We are very excited to have completed the property acquisition for our new Norwood facility," said Kimberly McWaters, president and chief executive of Universal Technical Institute, Inc. "We believe this campus will strengthen our presence in the Northeast market, while helping meet demand from prospective students and industry in the region."
Universal Technical Institute Inc. provides technical education training for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians.
The Sherwin-Williams Com-pany has announced its financial results for the fourth quarter and year ended December 31, 2004.
Consolidated net sales increased 16.7 percent in the fourth quarter to $1.50 billion from $1.28 billion in last year's fourth quarter and increased 13.1 percent in the full year to $6.11 billion from $5.41 billion in 2003. The net sales results include the operations of three acquisitions not yet fully annualized in the fourth quarter of 2004 and the operations of two larger acquisitions, Duron, Inc. and Paint Sundry Brands Corporation, beginning with the month of September 2004. The acquisitions increased consolidated net sales $128.0 million, or 10.0 percent, in the fourth quarter and $222.6 million, or 4.1 percent, in the full year 2004.
Diluted net income per common share increased 18.8 percent in the fourth quarter and increased 20.4 percent for the full year 2004.
Net income increased 16.5 percent in the fourth quarter of 2004 to $82.5 million from $70.8 million in last year's fourth quarter and increased 18.4 percent for the full year 2004 to $393.3 million.
The Automotive Finishes Segment net sales increased 15.7 percent in the fourth quarter to $131.7 million and 12.6 percent for the year to $514.3 million versus comparable periods last year. Currency exchange fluctuations in 2004 had only a minor impact on net sales of this Segment in the fourth quarter and full year. Increased net sales in the fourth quarter and full year were primarily due to improving domestic sales, new product introductions, improving international sales, and the April 2004 acquisition of a majority interest in an automotive coatings company in China.
Operating profit in this Segment increased 3.1 percent in the quarter to $15.0 million and 10.8 percent for the year to $58.1 million. Operating profit for the fourth quarter and the year improved despite rising raw material costs, particularly in the fourth quarter. The operating profit improvements were primarily due to the sales volume increases, sales of higher margin new products, and profits of the China acquisition along with improvements in both the international and domestic business units.
Commenting on the results, Christopher M. Connor, Chairman and Chief Executive Officer, said, "We are pleased that we were able to report record earnings of $2.72 per share in spite of rapidly rising raw material costs. This improvement was due to significant volume gains, control of operating expenses, and the benefits of effective tax planning. Though significant raw material cost increases have adversely impacted our gross margins, in the fourth quarter we have announced and are implementing price increases and have taken other actions that will stabilize our margins for the 2005 year. "
Connor continued, "We are encouraged with the strengthening of both the domestic and international automotive markets in which our Automotive Finishes Segment does business and with their new product introductions and new branch openings. We continue to be pleased with the steady improvements in sales and operational performance of our International Coatings business units.
"We anticipate that first quarter 2005 net sales will increase in the low double digits versus the first quarter of 2004, partially due to the recently completed acquisitions.... For the full year 2005, we expect net sales will also increase in the low double digits over 2004..."
As of January 31, 2005, the employees of BASF worldwide have donated approximately $1.8 million to help the victims of the tsunami catastrophe in Asia. This amount will be matched by BASF. In addition, the company provided about $1.3 million in immediate aid in the direct aftermath of the disaster, bringing the total donation to approximately $4.9 million for aid projects in Indonesia, Sri Lanka, India and Thailand.
Employees in North America donated $108,400. With the company's match and some additional funds from the Canadian government, BASF's contribution from North America will amount to approximately $225,000.
BASF's immediate aid of $1.3 million will be used for the following projects in southern Asia:
- Indonesia: BASF donated two drinking water purification plants to the German government's disaster relief organization in order to rapidly secure a supply of clean water for the victims of the tsunami in Banda Aceh. In addition, BASF provided clothes, kitchen utensils, tents and medicine to several refugee camps.
- Sri Lanka: BASF is supporting a project organized by "Habitat for Humanity" that will finance the construction of about 300 homes in the devastated areas. In the south of the country in particular, the tsunami has deprived many fishing families of their means of living. BASF is helping them by repairing several fishing boats.
- India: The victims will be individually helped in collaboration with the national relief fund of the Indian Prime Minister. The aim is to give the people a fresh start after the catastrophe.
- Thailand: BASF is working with the Thai Red Cross to reconstruct a school, which at the same time plans to establish a long-term partnership between itself and BASF Thailand.
BASF employees in India and Pakistan donated one day's salary. In Indonesia, BASF's management provided blankets and medical supplies as first aid in the worst hit province of Aceh. BASF Indonesia took the lead in founding an aid organization "Indonesian-German Disaster Relief Committee" (INDOGERM-direct), which will above all help to coordinate donations, post-trauma rehabilitation of victims and reconstruction of buildings and infrastructure.
"The overwhelming response to the appeal for donations shows that BASF's employees think globally and that efforts to help the tsunami victims do not stop at national borders," said Dr. Jurgen Hambrecht, Chairman of the Board of Executive Directors for BASF.
The National Auto Body Council (NABC) has announced the appointment of Janet Chaney as Chairman of NABC’s PRIDE committee.
“The position was recently held by Stacy Bartnik,” Guy Bargnes, NABC President said. “But she was elected Vice President of the Council at our annual meeting in Las Vegas, and that position will put additional demands on her time.”
“Janet Chaney has been a member of the PRIDE committee for several years,” commented Bartnik. “She did extensive research into past Award winners, and has excellent knowledge of the committee’s workings. I have great confidence that she will take the PRIDE program to new levels.”
The National Auto Body Council’s PRIDE Award program annually recognizes those in the Collision Industry that selflessly give their time, energy, and often money, to causes outside the Industry in order to make their communities better places to live.
“Stacy Bartnik set the bar incredibly high during her years as PRIDE Chairman,” said Chaney. “Every year the quantity and quality of nominations increased. That is a tough act to follow. But I wouldn’t show respect for the job she did if I didn’t try to do even better.
Nominations can be filled out online at the NABC website: www.autobodycouncil.org.
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