Keystone Automotive Industries accepted the Frost & Sullivan 2005 Market Leadership of the Year Award at the annual dinner held in La Jolla, California in February 2006. Frost & Sullivan conducted a nationwide study in which Keystone was named the number one supply source choice in all collision repair product categories. 

Each year this award is presented to a company that has demonstrated excellence in the majority of product and service metrics. Key metrics include product quality, best price, component fit, product innovation, customer service, after sales service, and brand image. The Award lauds tremendous responsiveness to customer needs and continual focus on long and short-term customer profitability goals.

"Keystone is honored to receive this award and will continue to strive for excellence," stated Christopher Northup, Key-stone vice president. "Keystone's goal is to supply our customers with quality products, every time. It's gratifying to hear we are successful in meeting their needs."

According to Frost & Sullivan's consulting analysts, Rick Brown and Mary-Beth Kellenger, "Keystone's flawless execution of its strategy has resulted in strong revenues and a fiercely loyal clientele that will allow Keystone to further increase its market share."

CFO reluctantly moves on

In other Keystone news, John M. Palumbo has resigned as chief financial officer to accept a similar position with a Los Angeles-based solar energy company. Terry Tuttle, currently the company's controller, will become vice president finance.

"John has contributed tremendously to our organization during his tenure of almost ten years. We understand this was not an easy decision for him to make, but appreciate the tremendous opportunity he has been offered and wish him the best," said Richard Keister, Keystone's president and chief executive officer.

"This was a very difficult decision to make as I have truly enjoyed my experience with Keystone on both a professional and personal level. The company's financial condition has never been stronger and with expected record sales and earnings for the fiscal third quarter ended December 30, 2005, the company is well-positioned to capitalize on the numerous opportunities in the automotive aftermarket industry," Palumbo stated.

Record earnings

In financial news, Keystone reported record earnings and sales for its fiscal 2006 third quarter and year to date, ended December 30, 2005.

Net income for the fiscal third quarter climbed 77.1 percent to $7.1 million, or $0.44 per diluted share, from $4.0 million, or $0.25 per diluted share, a year ago. Net sales for the same period increased 20.3 percent to $164.4 million from $136.6 million last year.

Net income for the nine months jumped 48.2 percent to $14.7 million, or $0.91 per diluted share, from $9.9 million, or $0.63 per diluted share, a year earlier. The nine-month period ended December 30, 2005, contained 39 weeks compared with 40 weeks a year earlier. Net sales for the nine months increased 10.7 percent to $448.4 million from $405.2 million a year ago (13.5 percent when adjusted for the one less week in the current fiscal year).

Year-to-date 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 $0.66 per diluted share.

Same store sales for the fiscal third quarter and the nine-month period increased 15.0 percent and 11.0 percent (adjusted to reflect the 40-week period a year ago), respectively.

"These types of performance records only occur because 3,700 team members care deeply about our company, our customers, and each other; they are the ones who make it happen. Sure, management has provided a few new tools in terms of sales, supply chain, accountability and cost initiatives, but in this business it's all about our people making it happen for their customers every day," stated Keister.