KEYSTONE AUTOMOTIVE INDUSTRIES INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x	Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.

For the quarterly period ended: December 31, 2004

¨	Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.

For the Transition period from to

Commission file number 0-28568

KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


California		95-2920557
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)


700 East Bonita Avenue, Pomona, CA		91767
(Address of principal executive offices)		(Zip Code)

(909) 624-8041

(Registrant’s telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨.

The number of shares outstanding of the registrant’s Common Stock, no par value, at February 7, 2005 was 15,755,000 shares.

KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

INDEX


		Page Number

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets	3

	December 31, 2004 (unaudited) and March 26, 2004

	Condensed Consolidated Statements of Income	4

	Thirteen weeks (unaudited) and forty weeks (unaudited) ended December 31, 2004

	Thirteen weeks (unaudited) and thirty-nine weeks (unaudited) ended December 26, 2003

	Condensed Consolidated Statements of Cash Flows	5

	Forty weeks (unaudited) ended December 31, 2004

	Thirty-nine weeks (unaudited) ended December 26, 2003

	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

Item 3.	Quantitative and Qualitative Disclosure About Market Risks	12

Item 4.	Controls and Procedures	13

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	13

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13

Item 3.	Defaults upon Senior Securities	13

Item 4.	Submission of Matters to a Vote of Security Holders	13

Item 5.	Other Information	13

Item 6.	Exhibits	16

Signatures		17

Certifications

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Keystone Automotive Industries, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)


	December 31, 2004			March 26, 2004
	(Unaudited)			(Note)
ASSETS
Current Assets:
Cash and cash equivalents	$	4,807		$	3,176
Accounts receivable, net of allowance of $1,114 at December 2004 and $887 at March 2004		48,239			44,005
Inventories, primarily finished goods		113,901			107,221
Other current assets		7,837			11,532

Total current assets		174,784			165,934
Plant, property and equipment, net		32,384			30,652
Goodwill		11,109			9,662
Other intangibles, net of accumulated amortization of $3,766 at December 2004 and $3,565 at March 2004		1,008			1,323
Other assets		8,528			8,342

Total assets	$	227,813		$	215,913

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Credit facility	$	2,373		$	10,000
Accounts payable		21,691			18,598
Accrued liabilities		15,828			14,477
Income tax liabilities		1,503			—

Total current liabilities		41,395			43,075
Other long-term liabilities		872			1,311
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, no par value:
Authorized shares—3,000,000
None issued and outstanding		—			—
Common stock, no par value:
Authorized shares—50,000,000
Issued and outstanding shares 15,750,000 at December 2004 and 15,443,000 at March 2004		92,311			89,492
Restricted Stock		362			180
Additional paid-in capital		5,967			5,967
Retained earnings		87,297			76,841
Accumulated other comprehensive loss		(391	)		(953	)

Total shareholders’ equity		185,546			171,527

Total liabilities and shareholders’ equity	$	227,813		$	215,913

The accompanying notes are an integral part of these condensed consolidated financial statements.


NOTE:		The balance sheet at March 26, 2004 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

Keystone Automotive Industries, Inc.

Condensed Consolidated Statements of Income

(In thousands, except share and per share amounts)

(Unaudited)


	Thirteen Weeks Ended December 31, 2004			Thirteen Weeks Ended December 26, 2003			Forty Weeks Ended December 31, 2004			Thirty-nine Weeks Ended December 26, 2003
Net sales	$	136,631		$	126,277		$	405,156		$	361,040
Cost of sales		76,819			70,717			229,128			203,679

Gross profit		59,812			55,560			176,028			157,361
Operating expenses:
Selling and distribution		40,379			37,101			121,479			107,801
General and administrative		13,166			11,360			39,169			32,020

Operating income		6,267			7,099			15,380			17,540
Other income		402			485			2,102			1,678
Interest expense		(58	)		(188	)		(216	)		(528	)

Income before income taxes		6,611			7,396			17,266			18,690
Income taxes		2,599			2,889			6,810			7,316

Net income	$	4,012		$	4,507		$	10,456		$	11,374

Per Common Share:
Net income per share:
Basic	$	.26		$	.30		$	.67		$	.76

Diluted	$	.25		$	.29		$	.66		$	.75

Weighted average common shares outstanding:
Basic		15,699,000			15,064,000			15,597,000			14,901,000

Diluted		15,844,000			15,464,000			15,776,000			15,214,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

Keystone Automotive Industries, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Forty Weeks Ended December 31, 2004			Thirty-nine Weeks Ended December 26, 2003
Operating activities:
Net income	$	10,456		$	11,374
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,729			4,822
Provision for losses on uncollectible accounts		300			766
Provision for write-down of inventories		1,830			1,084
Gain on sale of assets		(33	)		(53	)
Changes in operating assets and liabilities, net of effect of business acquisitions:
Accounts receivable, net		(4,136	)		(1,781	)
Inventories		(7,926	)		939
Other assets		3,446			1,948
Accounts payable and accrued liabilities		5,622			(5,028	)

Net cash provided by operating activities		15,288			14,071
Investing activities:
Proceeds from sale of assets		462			135
Purchases of property, plant and equipment		(6,899	)		(9,668	)
Acquisitions of certain service centers, net of cash received		(2,401	)		(12,641	)

Net cash used in investing activities		(8,838	)		(22,174	)
Financing activities:
(Payments) borrowings on credit facility		(7,627	)		2,287
Other debt, net		(11	)		(9	)
Net proceeds on option exercise		2,819			5,020

Net cash (used in) provided by financing activities		(4,819	)		7,298

Net increase(decrease) in cash and cash equivalents		1,631			(805	)
Cash and cash equivalents at beginning of period		3,176			3,658

Cash and cash equivalents at end of period	$	4,807		$	2,853

Supplemental disclosures
Interest paid during the period	$	224		$	514

Income taxes paid during the period	$	2,441		$	5,759

The accompanying notes are an integral part of these condensed consolidated financial statements.

Keystone Automotive Industries, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

December 31, 2004

1.	Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for fair presentation, with respect to the interim financial statements, have been included. The results of operations for the 40-week period ended December 31, 2004 are not necessarily indicative of the results that may be expected for the full year ending April 1, 2005. For further information, refer to the financial statements and footnotes thereto for the year ended March 26, 2004, included in Keystone Automotive Industries, Inc.’s (the “Company”) report on Form 10-K filed with the Securities and Exchange Commission on June 9, 2004.

2.	Fiscal Year

The Company uses a 52/53 week fiscal year. The Company’s current fiscal year ends on April 1, 2005. The operating results for the nine-month period ended December 31, 2004 contained forty weeks as compared to the same period in the prior fiscal year which contained thirty-nine weeks.

3.	Income Taxes

The income tax provision for interim periods is based on an estimated effective annual income tax rate.

4.	Recently Issued Accounting Pronouncements

On October 13, 2004, the Financial Accounting Standards Board (“FASB”) concluded that the Proposed Statement of Financial Accounting Standards, Share-Based Payment, which would require all com

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