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Keystone Automotive Operations Reports Strong Fiscal 2006 Results


March 2007
 Filed under: CORPORATE Car News | CORPORATE Headlines
EXETER, Pa., March 29 /PRNewswire/ -- Keystone Automotive Operations, Inc. (the "Company"), the leading distributor and marketer of specialty automotive equipment and accessories in North America, today announced financial results for the year ended December 30, 2006.

"Keystone made great strides during the year as we focused on expanding and better serving our customer base," said Ed Orzetti, the Company's Chief Executive Officer. "Significant accomplishments included opening a new distribution center in Georgia, beginning the process of consolidating two nearby warehouses into one new facility in southern California, and adding new truck routes in previously underserved regions. We're increasing our efficiency while simultaneously striving to be the best partner possible to our valued customers and vendors. Despite some challenging headwinds in the industry, Keystone maintains a strong competitive position and is well- positioned for the future."

Highlights include: - For the fiscal year ended December 30, 2006, sales were $618.7 million, an increase of $109.6 million, or 21.5%, compared to $509.1 million in the prior year. Gross profit for the fiscal year ended December 30, 2006 was $197.4 million, a 19.1% increase over the prior year's $165.8 million. Gross margin decreased to 31.9% from 32.6% in the prior year, due primarily to lower product selling margin. - Operating income for the current year was $33.4 million, an increase of $3.7 million, or 12.4%, compared to $29.7 million in the prior year. Operating income growth was hampered by investments made to leverage our existing infrastructure, such as a new distribution center in the southeastern United States and a new cross-dock in Minnesota; additional delivery runs to better serve an expanded customer base; and the decrease in gross margin noted above. Higher interest expense for the year contributed to a full year net loss of $(0.1) million, versus net income of $1.8 million in the prior year. - Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the fiscal year was $53.9 million, an increase of 10.2%, or $5.0 million, over the prior year. At the end of 2006 the Company had net debt of $371.7 million (net of cash and cash equivalents of $2.7 million). - Net sales for the fourth quarter ended December 30, 2006 were $138.7 million, an increase of $19.8 million, or 16.6%, compared to $118.9 million in the prior year. The sales increase was driven primarily by the acquisition of Reliable Automotive in December 2005 and further penetration in our developing markets. Gross profit for the fourth quarter ended December 30, 2006 was $42.3 million versus $38.6 million in the prior year, an increase of 9.6%. Gross margin declined to 30.5% in this year's fourth quarter from 32.4% in the prior year, driven primarily by lower product selling margin. - Operating income for the fourth quarter ended December 30, 2006 was $0.4 million, a decrease of $3.1 million compared to $3.5 million in the prior year. The Company recorded a net loss of $4.3 million in the fourth quarter ended December 30, 2006 versus a loss of $2.5 million in last year's fourth quarter, driven primarily by the decrease in operating income and incremental interest expense related to the financing for the Reliable acquisition. These decreases were partially offset by income tax benefits. - EBITDA for the fourth quarter ended December 30, 2006 was $5.4 million, a decrease of $2.9 million versus the prior year. Summary Financials Summary Income Statement ($ in millions) Three Months Three Months Fiscal Year Fiscal Year Ended Ended Ended Ended December December December December 31, 2005 30, 2006 31, 2005 30, 2006 Net sales $118.9 $138.7 $509.1 $618.7 Gross margin 38.6 42.3 165.8 197.4 Operating income 3.5 0.4 29.7 33.4 Net income (loss) (2.5) (4.3) 1.8 (0.1) Summary Balance Sheet ($ in millions) As of As of December 31, 2005 December 30, 2006 Assets Current assets $184.4 $194.5 Property, plant and equipment, net 51.9 52.4 Other non-current assets 455.4 441.6 Total Assets $691.7 $688.5 Liabilities and Stockholder's Equity Current liabilities 90.6 64.6 Long-term debt 350.5 372.9 Other long-term liabilities 63.6 63.3 Total Liabilities 504.7 500.8 Stockholder's Equity 187.0 187.7 Total Liabilities and Stockholder's Equity $691.7 $688.5

Conference Call Details

The Company will hold a conference call to discuss the financial results for the fourth quarter ended December 30, 2006 on April 3, 2007, at 1:30 p.m. EDT. To participate, please dial in to the conference call at (866) 600-0797, access code 2491160. The conference call topic is "Keystone Automotive Operations, Inc. Earnings Conference Call".

A telephone replay of the call will be available from 3:00 p.m. EDT on April 3, until 11:59 p.m. EDT on April 10. The replay of the call may be accessed by dialing (800) 642-1687, access code 2491160.

About Keystone Automotive Operations

Keystone Automotive Operations, Inc. ( www.ekeystone.com ) is the leading distributor and marketer of specialty automotive equipment and accessories in North America, providing product lines from approximately 825 vendors to approximately 23,500 wholesale customers. The Company operates four distribution centers and 19 non-inventory stocking cross-docks in the U.S. and Canada, as well as a fleet of over 425 trucks that deliver to customers in over 42 states and 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.

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