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Letter to the Editor

Smiling at Deadline

As I put pen to paper today, several days since I set up this month’s stock chart on July 15, I must make note that the Dow is up over 400 points in ten days time. I almost want to do another chart, but our dear editor is muttering “Deadline, dead, dead” in a rather frightening tone, so I should probably avoid asking her to redesign page 23.

A very quick look at how our Collision Repair Industry related stocks are faring on Wall Street today reveals that all of their per share stock prices are up a bit since mid-month, except for paint manufacturer Valspar. The company just completed the acquisition of a majority interest in China’s Huarun Paints (See page 8.), so this is certainly only a minor and temporary blip in Valspar’s consistently good and steady per share price.

Our other automotive refinish manufacturers are doing pretty well on Wall Street. Both PPG and Sherwin-Williams have released good quarterly financial reports (See pages 4 and 5 for details.).

Auto retailer AutoNation saw its second-quarter profit drop 63 percent. The company also just announced that its chief financial officer, Craig Monaghan, will leave the company this month to become CFO for Sears Holdings Corp. Quarterly net income totaled $72.7 million compared to $194.8 million a year ago.

It is not all gloom at AutoNation, though. During the recent quarter the company paid off $334.2 million in debt, resulting in a repurchase charge of $21 million. Still, despite a slight decrease in new vehicle sales, used car sales and parts and service profits rose.

Car dealer United Auto Group reported that the company’s second quarter profit rose 11 percent, helped by an almost three percent increase in same-store sales. Revenue grew to $2.93 billion from $2.62 billion in the year-ago period.

Our aftermarket suppliers continue to have good days at the Stock Exchange. Keystone Automotive’s per share stock price is up about 25 percent since its beginning of the year posting, and LKQ, at just over $20 per share, is up over 15 percent YTD.

LKQ’s recently reported second quarter earnings rose 53 percent, powered by strong revenue growth from acquisitions. Revenue grew 43 percent to $195 million from $136 million in the same quarter last year.

Our Collision Repair Industry related insurers are treading water this month. With Progressive still paddling back after its recent stock split, the company’s per share stock price is off about 17 percent YTD. Insurers are certainly checking daily weather forecasts, wondering if hurricane season will be as brutal as in 2005.

Will this month’s Wall Street rally develop into something amazing? I think not, but I am glad to report that the Dow rose 30 more points since I started this page. With instability in the Middle East and rising oil and manufacturing costs all around us, let’s enjoy the good news while we can!

-Charles Baker-

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