1012393--6/14/2006--KEYSTONE_AUTOMOTIVE_INDUSTRIES

related topics

{financial, litigation, operation}

{customer, product, revenue}

{product, market, service}

{cost, regulation, environmental}

{stock, price, operating}

{operation, international, foreign}

We encounter intense competition from OEMs, all of which have substantially greater financial, distribution, marketing and other resources. Other OEM direct and indirect activities designed to eliminate the aftermarket as competition have increased our expenses and are designed to threaten our business. We depend upon the continued acceptance of aftermarket collision parts by insurance companies in the repair of policyholders vehicles. Our business has been negatively impacted by litigation challenging the use of aftermarket collision replacement parts in the repair of vehicles covered by insurance. We are dependent upon a relatively small group of suppliers and may be adversely impacted by raw material shortages, primarily steel and nickel and price increases in these materials. We rely upon a fleet of our trucks to deliver substantially all of our products to our customers and increases in fuel prices or other difficulties with our fleet may be material to our results of operations. A decline in the number of collision repairs could have a material adverse impact on the Company. We are subject to numerous factors that impact our sales and earnings both short-term and long-term, many of which may be adverse. We rely heavily on Information Technology in most aspects of our business from order entry through billing and collection to financial statement preparation and disruptions may adversely impact our business. We are subject to compliance with government laws and regulations, including environmental restrictions. Our Common Stock is subject to significant fluctuations for a variety of reasons, many of which are beyond the control of the Company.

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1012393--6/14/2006--KEYSTONE_AUTOMOTIVE_INDUSTRIES_INC