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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               ----------------

                                   FORM 10-K

(Mark One)

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
   ACT OF 1934

   For the fiscal year ended March 31, 2000

                                      OR

[_]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

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                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.
            (Exact name of registrant as specified in its charter)

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

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

      Registrant's telephone number, including area code: (909) 624-8041

          Securities registered pursuant to Section 12(b) of the Act:

                                     None

          Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, no par value
                               (Title of Class)

                               ----------------

  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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-K or any
amendment to this form 10-K. [_]

  The aggregate market value of the voting stock held by nonaffiliates of the
registrant based upon the closing sales price of its Common Stock on June 16,
2000 on the Nasdaq National Market was approximately $81,284,850. For purposes
of the foregoing calculation, shares of Common Stock held by each officer and
director and by each person who may be deemed to be an affiliate have been
excluded.

  The number of shares of Common Stock outstanding as of June 16, 2000:
14,489,345

                      DOCUMENTS INCORPORATED BY REFERENCE

  The information required by Part III is incorporated by reference to
portions of the Registrant's definitive proxy statement for the 2000 Annual
Meeting of Stockholders which will be filed with the Securities and Exchange
Commission within 120 days after the close of the 2000 fiscal year.

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                          FORWARD LOOKING STATEMENTS

  This Annual Report on Form 10-K contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that involve risks and uncertainties, such as
statements of the Company's strategies, plans, objectives, expectations and
intentions. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain
factors, including those set forth under "Cautionary Statements" in Item 1
below and elsewhere in this Annual Report. The cautionary statements made in
this Annual Report should be read as being applicable to all related forward-
looking statements wherever they appear in this Annual Report.

                                    PART I

ITEM 1. BUSINESS

General

  Keystone Automotive Industries, Inc. ("Keystone" or the "Company") is the
nation's leading distributor of aftermarket collision replacement parts
produced by independent manufacturers for automobiles and light trucks.
Keystone distributes products primarily to collision repair shops throughout
most of the United States. In addition, the Company recycles and produces
chrome plated and plastic bumpers and remanufactures alloy wheels. The
Company's product lines consist of automotive body parts, bumpers, autoglass
and remanufactured alloy wheels, as well as paint and other materials used in
repairing a damaged vehicle. Keystone currently offers more than 19,000 stock
keeping units to over 25,000 collision repair shop customers, out of an
estimated 54,000 shops nationwide. Founded in Southern California in 1947, the
Company operates a "hub and spoke" distribution system consisting of 118
service centers, 23 of which serve as regional hubs and 20 depots, located in
35 states throughout the United States, as well as in Vancouver, Canada and
Tijuana, Mexico. From these service centers, Keystone has over 1,200 service
and salespersons who call on or have contact with collision repair shops. In
addition, the Company operates nine wheel remanufacturing facilities and 36
plastic and steel bumper recycling facilities.

  During fiscal 2000, the Company completed the following acquisitions. In May
1999, the Company acquired all of the assets of (i) Quality Bumpers, L.L.C., a
distributor of plastic and steel bumpers for automobiles and trucks, located
in Alabama and (ii) Nordan Products Division, Inc. and Nordan Distributors,
Inc., distributors of aftermarket collision replacement parts, with operations
in the state of Washington and Vancouver, Canada. In October 1999, the Company
acquired certain of the assets of Supreme Bumpers Inc., a distributor of
recycled and remanufactured bumpers, with operations in Michigan and Ohio and
in November 1999, it acquired certain of the assets of Auto Body Supply, Inc.,
a distributor of aftermarket collision replacement parts, with operations in
Pennsylvania.

  In addition, during fiscal 2000, the Company opened new service centers in
Elkhart, Indiana; Little Rock, Arkansas; Lubbock, Texas and Esconaba,
Michigan.

  See "Cautionary Statements" below concerning the impact on the Company as a
result of the decision in the State Farm Mutual Automobile Insurance Company
("State Farm") class action lawsuit and subsequent actions by other insurers
and state legislatures and administrators.

Industry Overview

  History. The Company estimates that the wholesale market for aftermarket
collision parts is currently $1.8 billion in annual expenditures, or
approximately 15% of the collision parts market. These estimates do not take
into account a possible shrinkage in the market as a result of the State Farm
decision and subsequent actions. See "Cautionary Statements" below. In
addition, the Company estimates that annual wholesale sales of paint

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and related supplies and equipment for collision repair currently account for
approximately $2.4 billion. Substantially all of the remainder of the
collision parts market consists of parts produced by original equipment
manufacturers ("OEMs"), and a substantial number of collision parts are
available exclusively from OEMs and are likely to remain so. The growth in
sales of aftermarket collision parts has been due primarily to the increased
availability of quality parts and to cost containment efforts by the insurance
industry.

  Before 1980, automotive collision parts were manufactured almost exclusively
by OEMs. During the 1960s and 1970s, due to prohibitive tariffs in Taiwan on
imported automobiles and restrictions on foreign ownership of manufacturing
facilities in Taiwan, certain Taiwanese automobile manufacturers commenced
producing automobiles for sale in Taiwan, which created the need for
additional parts manufacturers to supply the assembly lines. Since the early
1980s, these Taiwanese manufacturers have sought to reduce the effect on their
business of the cyclical demand for new automobiles by producing aftermarket
collision parts.

  An industry trade publication estimates that approximately 87% of all
automobile collision repair work is paid for in part by insurance.
Accordingly, major insurance companies exert significant influence over the
selection of collision parts used by collision repair shops. The availability
of aftermarket collision parts has been a major factor in the insurance
industry's efforts to contain the escalating cost of collision repairs.

  Aftermarket collision parts generally sell for between 20% and 40% less than
comparable OEM parts, resulting in substantial savings for insurance companies
by providing consumers with less expensive aftermarket parts and creating
competition, often resulting in lower prices for comparable OEM parts. The
Company believes that it may be somewhat insulated from downturns in the
general economy as a result of the fact that it is estimated that
approximately 87% of all automobile collision repair work is paid for in part
by insurance.

  As a part of their ongoing efforts to improve customer service, most major
insurance companies have adopted programs designating selected collision
repair shops in particular geographic areas as Direct Repair Providers
("DRPs"). DRPs are generally directed additional collision repair business by
the insurers in return for adhering to certain criteria, which may include the
use of aftermarket collision parts when available. To encourage consumers to
use DRPs, the insurers authorize the repair of collision damage without
obtaining the prior approval of the insurer's adjuster (thereby generally
providing for a quicker return of the vehicle to its owner) and offer
additional warranties concerning the repair services and parts used.

  Companies offering collision support services, including Automated Data
Processing ("ADP"), Mitchell International and CCC Information Services, Inc.,
have developed proprietary software and databases to provide insurance claims
adjusters and collision repair shops with computerized access to the
inventories and prices of selected distributors of both aftermarket and OEM
collision parts nationwide. The Company's inventory and prices are included in
these databases. Access to the providers' databases enables distributors with
computerized inventory control systems, such as the Company, to update prices
rapidly and notify collision repair shops of the availability of new products.

  Quality Assurance. In 1987, the Certified Automotive Parts Association
("CAPA") was founded to provide insurance companies, distributors, collision
repair shops and consumers with an objective method of evaluating the
functional equivalence of aftermarket collision parts and OEM collision parts.
CAPA, a non-profit association of insurance companies, manufacturers,
importers, distributors, collision repair shops and consumer groups,
establishes the specifications for, tests and certifies the quality of
aftermarket automotive collision parts. Through independent testing
laboratories, CAPA develops engineering specifications for aftermarket
collision parts based upon an examination of OEM parts; certifies the
factories, manufacturing processes and quality control procedures used by
independent manufacturers; and certifies the materials, fit and finish of
specific aftermarket collision parts. While, according to CAPA, the number of
collision part applications entitled to bear the CAPA certification had
increased from approximately 700 in August 1989 to approximately 2,500 by May
2000, the number of CAPA-certified parts approximates only 5% of the total
number of aftermarket collision parts. CAPA randomly reviews both the
factories and individual parts previously certified by it and solicits
comments concerning the quality of certified parts from collision repair shops
and consumers on a regular basis.

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  Most major insurance companies have adopted policies recommending or
requiring the use of parts certified by CAPA, when available. The Company
distributes parts certified by CAPA when available and actively participates
with CAPA, insurance companies and consumer groups in encouraging independent
manufacturers of collision parts to seek CAPA certification. Management
believes that the Company is the largest distributor of CAPA-certified parts
in the United States. See "Cautionary Statements" below for information with
respect to a class action lawsuit challenging the quality of aftermarket
collision replacement parts produced by independent manufacturers and the
validity of CAPA certifications.

  Consolidation. The collision repair shop industry is in the process of
consolidation due to, among other things, (i) an increase in the technical
complexity of collision repairs generally, (ii) an increase in governmental
regulations, including environmental regulations, applicable to collision
repair shops, (iii) the designation of certain collision repair shops as DRPs
and (iv) a reduction in the number of collision repairs generally. The
increasing number of aftermarket collision parts and makes and models of
automobiles has resulted in distributors being required to maintain larger
inventories. In addition, the trend towards fewer, larger and more efficient
collision repair shops has increased the pressure on distributors to provide
price concessions, just-in-time delivery and certain value-added services,
such as training, that collision repair shops require in their increasingly
complex and competitive industry. The above factors, in turn, have contributed
to a consolidation of distributors of aftermarket collision parts, providing
the Company with an opportunity to expand its operations into new markets and
to penetrate further existing markets. See "Cautionary Statements" below.

Strategy

  Historically, the Company's growth strategy has been a combination of
acquisitions, product expansion and increases in same store sales. As a result
of the State Farm decision and its aftermath, see "Cautionary Statements"
below, the Company has refocused its growth strategy to concentrate on product
differentiation, expansion of product sales not impacted by the State Farm
decision and strategic arrangements with customers not dependent on insurance
company specifications.

  To emphasize the high quality of aftermarket parts distributed by Keystone,
it has announced its "Keystone Platinum Plus" program. This program will only
cover the highest quality parts and parts will be warranted for the lifetime
of the owner of the vehicle being repaired, as long as that owner remains the
owner of the vehicle.

  Keystone is emphasizing sales of paint and related products, remanufactured
wheels, radiators and condensers. In addition, the Company plans to market
radiators and condensers to mechanical repair shops utilizing its extensive
distribution network.

  In February 2000, the Company entered into a strategic arrangement with one
of the largest automotive salvage yard groups in the country, pursuant to
which Keystone became the exclusive supplier of remanufactured OEM alloy
wheels to the salvage company and Keystone became the exclusive buyer of their
alloy wheel cores. In April 2000, the Company entered into a strategic
marketing arrangement with the leading auctioneer of salvage automobiles in
the country. The auctioneer intends to market Keystone parts to its rebuilder
customers and has agreed, under certain conditions, not to sell aftermarket
automobile parts competitive with Keystone products. Keystone has agreed,
under certain circumstances, not to market or resell Keystone products to
persons engaged in the business of operating salvage automobile auctions.

  In November 1999, the Company made an investment in GoMedia, Inc.
("GoMedia"), a company which has developed an online business community,
goClaims.com, addressing the automotive collision repair and claims processing
market. As a result of its investment, among other benefits, the Company will
be the default screen on goClaims.com's parts ordering screen and will have
"preferred" placement and pricing with respect to all advertising and
sponsorship.

                                       4
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Products

  The Company distributes more than 19,000 stock keeping units of aftermarket
collision parts and repair materials for most popular models of domestic and
foreign automobiles and light trucks, generally for the eight most recent
model years. The Company's principal product lines consist of automotive body
parts, bumpers, paint and other materials, remanufactured alloy wheels,
autoglass and light truck accessories. In addition, the Company recycles,
produces and distributes new and remanufactured plastic and chrome bumpers to
wholesale bumper distributors and to manufacturers of truck accessories.

  Automotive Body Parts. The Company distributes automotive and light truck
parts manufactured by multiple foreign and domestic manufacturers, including
fenders, hoods, radiators and condensers and head and tail light assemblies.
These products accounted for approximately $162.8 million, or 43.7% of the
Company's net sales in the fiscal year ended March 31, 2000.

  Bumpers. The Company distributes new and remanufactured plastic bumper
covers and steel bumpers manufactured by multiple domestic and foreign
manufacturers. For the fiscal year ended March 31, 2000, sales of plastic and
steel bumpers accounted for approximately $117.7 million, or 31.6% of the
Company's net sales. The Company believes that it is one of the nation's
largest non-OEM providers of new and recycled chrome plated bumpers for the
collision repair and restoration markets.

  Beginning in the late 1970s and the early 1980s, manufacturers of new
automobiles began changing from an almost exclusive use of chrome plated steel
bumpers to painted plastic bumpers. By the 1996 model year, manufacturers were
using painted plastic bumpers almost exclusively for their automobiles. Chrome
plated steel bumpers are still used extensively on light trucks and sport
utility vehicles. On an annual basis, the Company electroplates approximately
220,000 steel plated bumpers for automobiles and light trucks. Bumpers used in
the operations include new steel stampings, collision-damaged bumpers that
require straightening and replating and older model or antique bumpers that
require restoration and replating. The bumper repair and replating process
generally includes some or all of the following steps: straightening or
reforming to original dimensions; welding breaks or cracks; surface grinding
to remove rust and corrosion; chemical stripping to remove the original
electroplated finishes; metal polishing and buffing; electroplating layers of
copper, nickel and chromium; and inspecting and packaging.

  Paint and Other Materials. Beginning in fiscal 1993, the Company
significantly increased its emphasis on the sale of paint and other materials
used in repairing a damaged vehicle, including sandpaper, abrasives, masking
products and plastic filler. The paint and other materials distributed by the
Company are purchased from numerous domestic suppliers. For the fiscal year
ended March 31, 2000, sales of paint and other materials accounted for
approximately $57.7 million, or 15.5% of the Company's net sales. Certain of
these products are distributed under the name "Keystone."

  Remanufactured Alloy Wheels. In October 1995, the Company acquired a
remanufacturer of collision damaged alloy wheels located in Denver, Colorado,
and since that time, has opened or acquired eight additional remanufacturing
operations. According to industry sources, the percentage of new automobiles
equipped with alloy wheels, as opposed to steel wheels and hubcaps, has
increased from approximately 11% in 1985 to 50% for the 1999 model year. The
average wholesale cost of a new replacement alloy wheel is approximately $225,
compared to an average wholesale cost of approximately $125 for a
remanufactured alloy wheel. The alloy wheel remanufacturing process generally
includes some or all of the following steps: straightening, welding minor
dents or chips, machining, painting and applying clear powder coat. For the
fiscal year ended March 31, 2000, sales of remanufactured alloy wheels
accounted for approximately $23.0 million, or 6.2% of the Company's net sales.

  The remanufacturing of alloy wheels is generally conducted by many small
independent operators. The Company believes that there is a large and growing
demand for remanufactured alloy wheels and that, using its existing
distribution system and customer base, the Company is well-positioned to
service that demand.

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  Autoglass. The Company distributes autoglass, including windshields, side
windows and rear windows, which are purchased from two domestic manufacturers.
For the fiscal year ended March 31, 2000, sales of autoglass, which was
introduced by Keystone in fiscal 1993, accounted for approximately $4.9
million, or 1.3% of the Company's net sales.

Distribution, Marketing and Sales

  The Company's distribution system is designed to provide responsive customer
service and to foster long-term customer relations.

  Distribution System. The Company has developed a national "hub and spoke"
distribution system consisting of 118 service centers, 23 of which serve as
regional hubs and 20 depots. Each regional hub receives container shipments
directly from foreign and domestic manufacturers. Using the Company's fleet of
over 1,000 delivery trucks, each regional hub makes regular shipments to the
service centers in its region, which in turn make regular deliveries to its
repair shop customers. By maintaining a fleet of delivery trucks, the Company
ensures rapid delivery within its distribution system and to its customers. In
addition, each service center can order products directly from any hub or
service center. The Company manages its inventory and the ordering, shipment,
storage and delivery of products through centralized information systems that
allow the regional hubs and service centers to obtain timely information
regarding the location and availability of products. The continuing increase
in the number of makes and models of automobiles and light trucks and the
number of aftermarket collision parts has increased the pressure on
distributors to maintain larger inventories. The Company believes that its
"hub and spoke" distribution system allows it to offer its customers one of
the broadest available selections of aftermarket collision parts and to fill
most orders within 24 hours, while minimizing inventory costs.

  Sales and Marketing Staff. The Company has a marketing staff, which operates
from its corporate headquarters, and has over 1,200 sales representatives and
route salespersons who operate from its service centers. The marketing staff
develops all marketing and promotional materials, assists the service centers
in recruiting and training sales representatives, route salespersons and
customer service representatives, supervises the Company's in-house management
training program and supports general managers of its service centers, sales
representatives and route salespersons with computerized analyses of sales by
product, route and customer. In addition, the marketing staff conducts
educational programs for regional insurance executives and claims adjusters to
explain the role of aftermarket collision parts in containing the escalating
costs of claims and in order to facilitate the implementation of insurance
companies' policies favoring aftermarket collision parts.

  The general managers of the Company's service centers are actively involved
in customer calls. The Company believes that this local control and expertise
have contributed significantly to its growth. Through periodic training
programs and performance reviews, the Company seeks to enhance the
professionalism and technical expertise of its route salespersons. As a
result, the Company believes that its route salespersons are highly attendant
to the needs of the Company's customers.

  Marketing Programs. The Company offers various marketing programs to foster
closer customer relations, including a warranty program in which the Company
generally warrants its products against defects in material and workmanship
for as long as the repair shop's customer owns the vehicle.

Customers

  The Company's current customers consist of more than 25,000 collision repair
shops located in 35 states and Vancouver, Canada and Tijuana, Mexico, none of
which accounted for more than 1% of the Company's net sales during the fiscal
year ended March 31, 2000. The Company also distributes its bumpers to
wholesale distributors and to manufacturers of truck accessories. The size of
its customer base reduces the Company's dependence on any single customer and
its national scope mitigates the effects of regional economic changes and
regional weather patterns. Collision Repair Industry Insight, an industry
trade publication, estimates that there are over 54,000 collision repair shops
nationwide. The number of collision repair shops to whom the

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Company sold products increased from approximately 13,400 in fiscal 1993 to
approximately 25,000 in fiscal 2000.

  The Company's regional hubs also sell collision parts to local distributors
who may compete with the Company. These sales accounted for less than 10% of
the Company's net sales during the fiscal year ended March 31, 2000 and no
distributor accounted for more than 1% of the Company's net sales for such
fiscal year.

Suppliers

  The products distributed by the Company are manufactured by over 60
manufacturers, and no single supplier provided as much as 10% of the products
purchased by the Company during fiscal 2000. The Company believes that it is
one of the largest customers of each of its ten largest suppliers. In fiscal
2000, approximately 80% of the products distributed by the Company were
manufactured in the United States or Canada, and approximately 20% were
imported directly from manufacturers in Taiwan. The Company's orders from
domestic suppliers generally are received within 10 days and orders from
foreign manufacturers generally are received in between 60 and 90 days.
Although the Company has no manufacturing agreements with any of its suppliers
and competes with other distributors for production capacity, the Company
believes that its sources of supply and its relationships with its suppliers
are satisfactory. Although alternative suppliers exist for substantially all
products distributed by the Company, the loss of any one supplier could have a
material adverse effect on the Company until alternative suppliers are located
and have commenced providing products.

Competition

  Based upon industry estimates, the Company believes that approximately 79%
of collision parts are supplied by OEMs, compared with approximately 15% by
distributors of aftermarket collision parts and 6% by distributors of salvage
parts. See "Cautionary Statements" below for a discussion of a recent court
decision which is impacting the market share of aftermarket collision parts.
The Company encounters intense competition from OEMs, all of which have
substantially greater financial, distribution, marketing and other resources,
including greater brand recognition and a broader selection of collision
parts, than the Company. Accordingly, OEMs are in a position to exert pricing
and other competitive pressure on the Company. The distribution industry for
aftermarket collision parts is highly fragmented. The Company's competitors
generally are independently owned distributors having from one to three
distribution centers. The Company expects to encounter significant competition
in the future, including competition from OEMs, automobile dealerships,
distributors of salvage parts, buying groups and other large distributors.

  The Company competes with OEMs on the basis of price and perceived product
quality, and it competes with distributors of aftermarket collision parts
primarily on the basis of the competitive advantages provided by its position
as a market leader, experienced executive management and service center
managers, entrepreneurial corporate culture, superior customer service, its
relationship with certain insurance companies, and, to a lesser extent, on the
basis of price.

  The Company's chrome bumper plating operations compete in the wholesale
bumper distribution segment of the market with four companies, whom the
Company believes have greater regional sales than the Company. It also
competes with small chrome bumper platers or distributors in virtually every
geographical market in which it operates. The Company competes with small
chrome bumper platers and distributors primarily on the basis of quality and
service. Over the last 10 years, there has been a significant decrease in the
number of small bumper platers as a result of the decreasing use of chrome
plated bumpers on new automobiles and the increasing environmental
requirements for electroplaters. The Company believes that this trend will
continue, creating more sales opportunities for larger regional chrome bumper
platers, who are capable of meeting the increased financial and environmental
requirements of the future.

  The Company also encounters competition from the OEM's who supply new
replacement bumpers to the collision repair market and it competes with these
OEM's on the basis of price and perceived product quality.

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Government Regulation and Environmental Hazards

  The Company is subject to increasing restrictions imposed by various
federal, state and local laws and regulations. Various state and federal
regulatory agencies, such as the Occupational Safety and Health Administration
and the EPA, have jurisdiction over the Company's operations with respect to
matters including worker safety, community and employee "right-to-know" laws,
and laws regarding clean air and water. In addition, primarily as a result of
the State Farm decision and the attendant publicity, certain state
legislatures and regulators are considering imposing, or have imposed,
restrictions on the use of aftermarket collision parts. See "Cautionary
Statements."

Prior Ford Litigation

  In 1987, Ford Motor Company ("Ford") filed suit against the Company on the
grounds that between 1982 and 1987, the Company had misrepresented the quality
of the aftermarket collision parts sold by it for Ford automobiles. In May
1992, Ford and the Company settled this lawsuit. As part of the settlement,
the Company and its insurance companies paid Ford $1.8 million, of which the
Company contributed $450,000, as damages and agreed to finance a one-year
corrective advertising campaign conducted by Ford using the Company's name. As
a result of this settlement and the corrective advertising campaign, certain
insurance companies ceased listing the Company as an approved supplier of
aftermarket collision parts. Currently, most major insurance companies list
the Company as an approved supplier of aftermarket collision parts, and all
major insurance companies reimburse the cost of collision repairs using the
Company's products. The Company's business is highly dependent on the
continued acceptance of aftermarket collision parts in general, and the
Company's products in particular, by insurers, collision repair shops,
consumers and governmental agencies. See "Cautionary Statements" below.

Employees

  At May 31, 2000, the Company had approximately 2,679 full-time employees, of
whom 393 were engaged in corporate management and administration, 1,211 in
sales and customer service, 562 in warehousing and shipping and 523 in
manufacturing. Nine persons in the Newark, New Jersey chrome bumper recycling
facility are covered by collective bargaining agreements. The Company
considers its relations with its employees to be satisfactory.

Cautionary Statements

  State Farm Decision and Pending Actions. In July 1997, certain individuals
initiated a class action lawsuit against State Farm in the Illinois Circuit
Court in Williamson County (Marion, Illinois), asserting claims for breach of
contract, consumer fraud and equitable relief relating to State Farm's then
practice of sometimes specifying the use of parts manufactured by sources
other than the original equipment manufacturer ("non-OEM crash parts") when
adjusting claims for the damage to insured vehicles. The Williamson County
Court certified a near-nationwide class. It was alleged that this practice
breached State Farm's insurance agreements with its policyholders and was a
violation of the Illinois Consumer Fraud and Deceptive Business Practices Act
because non-OEM crash parts are inherently inferior to OEM crash parts and,
consequently, vehicles are not restored to their "pre-loss condition" as
specified in their policy. In October 1999, after a lengthy trial, the jury
awarded the class damages in the amount of approximately $460 million and the
judge assessed punitive damages against State Farm of over $700 million. State
Farm has appealed the verdict.

  Shortly after the verdict in the Williamson County case, State Farm
suspended specifying most non-OEM crash parts used in connection with
repairing cars covered by their insurance. Effective November 8, 1999,
Nationwide Insurance and Farmers Insurance also temporarily suspended
specifying many non-OEM crash parts. The action of these insurance companies
has had a material adverse impact on the Company's sales and net income and if
other insurance companies follow suit and the State Farm decision is not
overruled, the magnitude of the negative impact on the Company would likely
increase. See "Management Discussion and Analysis of Financial Condition and
Result of Operations-General" below.

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  At the present time, lawsuits are pending in a number of states against
several insurance companies alleging violation of contractual provisions and
various laws and statutes relating to the specification of non-OEM crash parts
in connection with the repair of damaged vehicles. These cases have been
brought as class actions and generally involve two different legal theories.
One line of cases is similar to State Farm contending that non-OEM crash parts
do not restore a vehicle to their "pre-loss condition" as provided for in the
insurance policy. The other theory is that of "diminished value," with the
contention being that in addition to repairing the vehicle, the owner should
be compensated for the difference between the pre-loss value and the value
after the vehicle is repaired. In at least one pending action, the Company
believes that CAPA has been joined as a defendant in connection with their
certification of non-OEM crash parts.

  While the Company was, or is, not a party to the State Farm lawsuit or the
other pending lawsuits, a substantial portion of the Company's business
consists of the distribution of non-OEM crash parts to collision repair shops
for the use in repairing automobiles, the vast majority of which are covered
by insurance policies. In the event that the State Farm verdict is repeated in
other similar cases or there is a substantial verdict upholding the diminished
value theory, and such cases are not overturned on appeal, with the result
that non-OEM crash parts are no longer specified by insurance companies to
repair insured vehicles, the aggregate cost to consumers will be substantial
and the impact on Keystone would be material and adverse. Once again, OEM's
would likely have monopoly pricing power with respect to many of the products
required to repair damaged vehicles.

  The Company believes that substantially all of the non-OEM crash parts which
it distributes are of similar quality to OEM crash parts and when installed in
a competent manner by collision repair shops, vehicles are restored to their
"pre-loss condition." In addition, the Company provides a warranty with
respect to the parts it distributes for as long as the owner at the time
repairs are made continues to own the vehicle.

  Federal and State Action. During the past two years, legislation was
introduced or considered in over 25 states seeking to prohibit or limit the
use of aftermarket parts in collision repair work and/or require special
disclosure before using aftermarket parts. To date legislation has been passed
in only three states and it has not had a material impact on the Company's
business. The Company anticipates the introduction of similar legislation in
many states during 2000 and beyond and if a number of states were to adopt
legislation prohibiting or restricting the use of non-OEM crash parts, it
could have a material adverse impact on the Company.

  In addition, recently, persons with a business interest in restricting the
use of non-OEM parts have also sought help from insurance regulators in at
least three states to attempt to do administratively what to date has not be
accomplished legislatively. In Florida, the Commissioner of the Department of
Agriculture & Consumer Services, has taken action designed to eliminate the
use of non-OEM crash parts in connection with insured repairs. The
Commissioner has also brought a legal action against an insurance company for
specifying the use of non-OEM parts. This action is currently having a
material adverse impact on the Company's sales in Florida. Action in the other
two states is in an early stage and the Company cannot predict the outcome.

  In addition, a U.S. Congressman has requested that the General Accounting
Office ("GAO") review the role of the National Highway and Transportation
Safety Administration in regulating the safety and quality of replacement
automotive parts. A GAO report is anticipated during 2000.

  Management Information Systems. In October 1998, the Company entered into an
agreement with a vendor for the purchase of a software package to be installed
on an enterprise-wide basis. To date, the Company has expended an aggregate of
approximately $6.5 million on software implementation relating to the
installation of the new enterprise software package and estimates that it will
spend an additional $2.5 million over the next 12 to 18 months. As the Company
is still in the initial phases of the implementation and such an
implementation involves uncertainty, there can be no assurance that the actual
costs will not exceed the estimate. To date, the costs have been paid using
funds generated from operating cash flow or the sale of assets and it is
anticipated that future costs will be paid from existing working capital, cash
flow from operations or borrowings under the Company's line of credit.

                                       9
<PAGE>

  At the present time, the Company estimates that the new enterprise software
system, which will consolidate the Company's various systems and address a
number of management concerns, will be installed and operating company-wide in
18 to 24 months. The estimated costs as of the projects described above are
based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of certain
resources and other factors. However, there can be no guarantee that these
time or cost estimates will be achieved, and actual results could differ
materially from those anticipated. Specific factors that might cause such
material differences include, but are not limited to, the availability and
cost of personnel trained in this area, and the inherent difficulty in
integrating new computer systems into the Company's existing operations.

  Continued Acceptance of Aftermarket Collision Replacement Parts. Based upon
industry sources, the Company estimates that approximately 87% of automobile
collision repair work is paid for in part by insurance; accordingly, the
Company's business is highly dependent upon the continued acceptance of
aftermarket collision replacement parts by the insurance industry and the
governmental agencies that regulate insurance companies and the ability of
insurers to recommend the use of such parts for collision repair jobs, as
opposed to OEM parts. As described above, the use of many of the products
distributed by the Company is being disputed in various forums.

  Acquisition Strategy. A principal component of the Company's growth strategy
has been to acquire other independent distributors of aftermarket collision
replacement parts operating in new geographic markets, as well as to increase
its penetration in existing markets. Since March 1996, the Company has
completed 23 acquisitions of a total of 92 service centers, located primarily
in the Northeast, Midwest, Mid-Atlantic and South, of which 15 have been
consolidated with existing locations or closed. Primarily as a result of the
State Farm decision, the Company does not anticipate completing any
acquisitions during fiscal 2001, although it continues to look at potential
transactions.

  Acquisition Risks. Although the Company investigates the operations and
assets that it acquires, there may be liabilities that the Company fails to,
or is unable to, discover, and for which the Company as a successor owner or
operator may be responsible. The Company seeks to mitigate the risk of these
potential liabilities by obtaining indemnities and warranties from the seller.
However, these indemnities and warranties may not fully cover the liabilities
due to their limited scope, amounts or duration, the limited financial
resources of the indemnitor or warrantor or other reasons. To date, the
Company has not recorded any material liabilities not discovered prior to
completing its acquisitions. In addition, acquisitions accounted for under the
purchase method of accounting generally involve the recording of goodwill and
deferred charges on the Company's balance sheet, which are amortized over
varying periods of time of up to 30 years. This amortization has the effect of
reducing the Company's reported earnings. At March 31, 2000, the Company had
recorded approximately $36.2 million in goodwill, net of accumulated
amortization. In addition, at March 31, 2000, the Company had recorded
approximately $1.9 million in deferred charges, net of accumulated
amortization, primarily related to noncompetition agreements, which are
amortized over the terms of those agreements, three to five years.

  Dependence on Key and Foreign Suppliers. The Company is dependent on a
relatively small number of suppliers. Although alternative suppliers exist for
substantially all products distributed by the Company, the loss of any one
supplier could have a material adverse effect on the Company until alternative
suppliers are located and have commenced providing products. In fiscal 2000,
approximately 80% of the products distributed by the Company were manufactured
in the United States or Canada and approximately 20% were imported directly
from manufacturers in Taiwan. As a result, the Company's operations are
subject to the customary risks of doing business abroad, including, among
other things, transportation delays, political instability, expropriation,
currency fluctuations and the imposition of tariffs, import and export
controls and other non-tariff barriers (including changes in the allocation of
quotas), as well as the uncertainty regarding future relations between China
and Taiwan. The percentage of imported products may decline in the future if
sales of autoglass, paint and related supplies and equipment and
remanufactured alloy wheels, which are manufactured in the

                                      10
<PAGE>

United States, continue to grow. Any significant disruption in the Company's
Taiwanese sources of supply or in its relationship with its suppliers located
in Taiwan could have a material adverse effect on the Company.

  Competition. The Company competes directly with, and encounters intense
competition from OEMs, all of which have substantially greater financial,
distribution, marketing and other resources, including greater brand
recognition and a broader selection of collision replacement parts.
Accordingly, OEMs are in a position to exert pricing and other competitive
pressures on the Company and other independent distributors, which could have
a material adverse effect on the results of operations of the Company. The
aftermarket collision replacement parts distribution industry is highly
fragmented. Typically, the Company's other competitors are independently owned
distributors having from one to three distribution centers. the Company
anticipates that it will encounter significant competition in the future,
including competition from automobile dealerships, distributors of salvage
parts, buying groups and other large distributors.

  Compliance with Government Regulations; Environmental Hazards. The Company
is subject to increasing restrictions imposed by various federal, state and
local laws and regulations. Various state and federal regulatory agencies,
such as the Occupational Safety and Health Administration and the United
States Environmental Protection Agency (the "EPA"), have jurisdiction over the
Company's operations with respect to matters including worker safety,
community and employee "right-to-know" laws, and laws regarding clean air and
water. Under various federal, state and local laws and regulations, an owner
or lessee of real estate or the operator of a business may be liable for the
costs of removal or remediation of certain hazardous or toxic substances
located on or in, or emanating from, property owned or used in the business,
as well as related costs of investigation and property damage. Such laws often
impose such liability without regard to whether the owner, lessee or operator
knew of, or was responsible for, the presence of such hazardous or toxic
substances. Other than as described below with respect to its bumper plating
operations, the Company does not currently generate substantial hazardous
waste in the ordinary course of its business. The Company believes that it
currently is in substantial compliance with all applicable laws and
regulations, and is not aware of any material environmental problem at any of
its current or former facilities. No assurance can be given, however, that the
Company's prior activities or the activities of a prior owner or operator of
an acquired service center or other facility did not create a material
environmental problem for which the Company could be responsible or that
future uses or conditions (including, without limitation, changes in
applicable laws and regulations) will not result in material environmental
liability to the Company. Furthermore, compliance with legislative or
regulatory changes may cause future increases in the Company's operating costs
or otherwise adversely affect operations. Certain of the Company's products,
such as paints and solvents, are highly flammable. Accordingly, the storage
and transportation of these materials expose the Company to the inherent risk
of fire.

  The Company acquired North Star Plating Company's bumper plating operations
in March 1997 and Midwest Bumper Company's plating operations in March 1999.
In addition to those operations, the Company currently conducts limited bumper
plating operations at one other facility and previously conducted similar
operations at 11 additional sites which were closed between 1983 and 1993. The
Company's bumper plating operations, which use a number of hazardous
materials, are subject to a variety of federal and state laws and regulations
relating to environmental matters, including the release of hazardous
materials into the air, water and soil. The Company endeavors to ensure that
its bumper plating operations comply with applicable environmental laws and
regulations. Compliance with such laws and regulations has not had a material
effect on the Company's capital expenditures, earnings or competitive
position, and no material capital expenditures with respect to the Company's
bumper plating operations are anticipated during the next 12 months. Although
the Company believes it is in substantial compliance with all applicable
environmental laws and regulations relating to its bumper plating operations,
there can be no assurance that the Company's current or former operations have
not, or will not in the future, violate such laws and regulations or that
compliance with such laws and regulations will not have a material adverse
effect on the Company's operations. Any inadvertent mishandling of hazardous
materials or similar incident could result in costly remediation efforts and
administrative and legal proceedings, which could materially and adversely
affect the Company's business and results of operations. In addition, future
environmental regulations could add to overall costs of the Company's bumper
plating business or otherwise materially and adversely affect these
operations.

                                      11
<PAGE>

  Volatility of Stock Price. The trading price of the Company's Common Stock
may be subject to significant fluctuations as a result of variations in the
Company's actual or anticipated operating results, changes in general market
conditions and other factors. In recent years, the stock market generally has
experienced significant price and volume fluctuations which often have been
unrelated or disproportionate to the operating performance of a specific
company or industry. There can be no assurance that the market price of the
Company's Common Stock will not decline below the current market price. It is
possible that in some future quarter, the Company's operating results will be
below the expectations of public market analysts or investors. In such event,
the price of the Company Common Stock may be materially and adversely
affected.

ITEM 2. PROPERTIES

  The Company's principal executive offices are located in Pomona, California,
on premises which contain approximately 20,000 square feet. The Pomona,
California offices are owned by the Company. In addition, the Company owns
facilities used as service centers in Chicago, Illinois; Bethlehem,
Pennsylvania; Denver, Colorado; New Albany, Indiana and Palmyra, New Jersey,
of which two of the facilities also serve as regional hubs and three serve as
wheel remanufacturing facilities. The Company leases its remaining facilities.

  The Company's regional hub facilities range from approximately 25,000 square
feet to 163,000 square feet. Its service center facilities range from
approximately 2,500 square feet to 30,000 square feet. All of its leased
properties are leased for terms expiring on dates ranging from on or about the
date hereof to the year 2015, many with options to extend the lease term. The
Company believes that no single lease is material to its operations, its
facilities are adequate for the foreseeable future and alternative sites
presently are available at market rates.

  Of the Company's service centers, six are leased from parties in whom
current officers or directors of the Company have an interest. See "Item 13"
below. The Company believes that the terms and conditions of leases with
affiliated parties are no less favorable to the Company than could have been
obtained from unaffiliated parties in arm's-length transactions at the time of
the execution of such leases.

ITEM 3. LEGAL PROCEEDINGS

  The Company is from time to time involved in litigation incidental to the
conduct of its business. The Company currently is not a party to any material
pending litigation.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  None.

                                      12
<PAGE>

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

  The Company's Common Stock began trading publicly on The Nasdaq Stock Market
under the symbol "KEYS" on June 20, 1996. The following table sets forth, for
the periods indicated, the range of high and low sale prices for Keystone's
Common Stock as reported by The Nasdaq Stock Market.

<TABLE>
<CAPTION>
                                                                   High   Low
                                                                  ------ ------
   <S>                                                            <C>    <C>
   Fiscal 1999
     First Quarter............................................... $28.13 $23.68
     Second Quarter..............................................  23.75  14.00
     Third Quarter...............................................  20.19  15.63
     Fourth Quarter..............................................  21.50  14.38
   Fiscal 2000
     First Quarter...............................................  19.25  14.13
     Second Quarter..............................................  19.00  10.88
     Third Quarter...............................................  10.13   5.38
     Fourth Quarter..............................................   7.00   4.88
   Fiscal 2001
     First Quarter (through June 16, 2000).......................   7.38   5.06
</TABLE>

  On June 16, 2000, the last reported sale price for the Common Stock of the
Company, as reported on The Nasdaq Stock Market, was $6.25 per share. As of
June 16, 2000, there were approximately 466 shareholders of record of the
Common Stock.

  The Company has never paid cash dividends on its Common Stock. The Company
currently intends to retain any future earnings to provide funds to operate
and expand its business and does not anticipate paying cash dividends on its
Common Stock in the foreseeable future. The payment of dividends is within the
discretion of the Company's Board of Directors, and will depend upon, among
other things, the Company's earnings, financial condition and capital
requirements, general business conditions and any restrictions in credit
agreements.

  In February 2000, the Company issued a warrant to purchase 100,000 shares of
its Common Stock to LKQ Corporation at an exercise price of $6.50 per share,
in connection with a supply agreement entered into with LKQ Corporation. The
issuance of the warrant was exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) of the Securities Act.

                                      13
<PAGE>

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

  The following selected consolidated financial data should be read in
conjunction with the consolidated financial statements and notes thereto and
Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" also included elsewhere herein.

<TABLE>
<CAPTION>
                                          Fiscal Year Ended
                          -----------------------------------------------------
                          March 29,  March 28,  March 27,  March 26,  March 31,
                            1996       1997       1998       1999      2000(1)
                          ---------  ---------  ---------  ---------  ---------
                              (In thousands, except per share amounts)
<S>                       <C>        <C>        <C>        <C>        <C>
Consolidated Statement
 of Income Data:
Net sales...............  $178,076   $223,806   $263,802   $332,047   $372,466
Cost of sales...........   106,169    130,590    149,855    186,150    211,840
                          --------   --------   --------   --------   --------
Gross profit............    71,907     93,216    113,947    145,897    160,626
Selling and distribution
 expenses...............    50,156     61,063     73,551     93,169    110,976
General and
 administrative
 expenses...............    12,388     15,699     18,101     24,873     30,800
Non-recurring expenses..       --         905      1,147      1,814      3,881
                          --------   --------   --------   --------   --------
Operating income........     9,363     15,549     21,148     26,041     14,969
Other income............       174        373      1,086      3,617      2,613
Interest expense........    (1,721)    (1,477)      (504)       (50)      (954)
                          --------   --------   --------   --------   --------
Income before income
 taxes..................     7,816     14,445     21,730     29,608     16,628
Income taxes............     2,836      4,435      7,497     11,843      6,819
                          --------   --------   --------   --------   --------
Net income..............  $  4,980   $ 10,010   $ 14,233   $ 17,765   $  9,809
                          ========   ========   ========   ========   ========
Net income per share:
  Basic.................  $   0.49   $   0.88   $   1.02   $   1.06   $   0.62
                          ========   ========   ========   ========   ========
  Diluted...............  $   0.49   $   0.87   $   1.01   $   1.05   $   0.62
                          ========   ========   ========   ========   ========
Weighted average common
 shares outstanding:
  Basic.................    10,250     11,408     13,915     16,784     15,899
                          ========   ========   ========   ========   ========
  Diluted...............    10,250     11,474     14,105     16,913     15,917
                          ========   ========   ========   ========   ========
Pro forma information
 (unaudited)(2):
  Net income, as
   previously reported..  $  4,980   $ 10,010   $ 14,233   $ 17,765   $  9,809
  Pro forma tax
   adjustment...........      (258)    (1,288)    (1,345)       --         --
                          --------   --------   --------   --------   --------
  Pro forma net income..  $  4,722   $  8,722   $ 12,888   $ 17,765   $  9,809
                          ========   ========   ========   ========   ========
Pro forma net income per
 share:
  Basic.................  $   0.46   $   0.76   $   0.93   $   1.06   $   0.62
                          ========   ========   ========   ========   ========
  Diluted...............  $   0.46   $   0.76   $   0.91   $   1.05   $   0.62
                          ========   ========   ========   ========   ========

Consolidated Balance
 Sheet Data:
Working capital.........  $ 18,134   $ 30,154   $ 72,454   $105,330   $ 86,152
Total assets............    71,780     87,183    119,696    194,094    183,817
Total current
 liability..............    38,335     38,240     21,539     26,551     31,869
Long-term debt..........     7,021      2,087        503        100         68
Shareholders' equity....    26,119     46,453     97,228    163,205    150,195
</TABLE>
--------
(1) Fiscal 2000 contained 53 weeks, all other periods contained 52 weeks.

(2) Pro forma information gives effect to an income tax adjustment to reflect
    taxation of the income of two corporations acquired in January 1998
    (accounted for as poolings of interests), as "C" corporations, rather than
    "S" corporations, at an estimated statutory rate of approximately 39%.

                                      14
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

  The following discussion and analysis is qualified in its entirety by, and
should be read in conjunction with, the "Selected Consolidated Financial Data"
as set forth in Item 6 above and the financial statements and notes thereto
included in Item 8 below. Except for the historical information contained
herein, the matters addressed herein constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. Forward-looking statements, such as statements of the Company's
strategies, plans, objectives, expectations and intentions, are subject to a
variety of risks and uncertainties that could cause the Company's actual
results to differ materially from those anticipated in these forward-looking
statements. The Cautionary Statements set forth in Item 1 above should be read
as being applicable to all related forward-looking statements wherever they
appear herein.

General

  Fiscal 2000 contained 53 weeks as compared to 52 weeks for the other fiscal
years set forth in Item 6 above. Consequently, comparisons of results may not
be meaningful.

  The results of operations for fiscal 2000 include the results with respect
to four acquisitions completed subsequent to March 26, 1999, accounted for as
"purchases," whereas fiscal 1999 does not include any results of operations
for those acquired entities. See "Recent Acquisitions" below. In addition, the
results of operations for fiscal 1999 include the results for Republic
Automotive Parts, Inc. ("Republic") only for the period subsequent to the
acquisition (June 27, 1998) and for the Midwest Bumper Company affiliated
group only for the period subsequent to the acquisition (January 4, 1999),
whereas the results of operations for fiscal 2000 include the results for
those operations for the entire period.

  As a result of the verdict in the State Farm class action in October 1999
and the fact that numerous other class actions are pending, State Farm,
Nationwide Insurance and Farmers Insurance have temporarily suspended
specifying the use of many aftermarket collision replacement parts in
connection with the repair of vehicles which they insure. See "Cautionary
Statements" above. These suspensions had a material, adverse effect on the
Company's revenues and earnings for fiscal 2000.

Recent Acquisitions

  In June 1998, the Company completed the acquisition of Republic and issued
2,907,000 shares of its Common Stock to the former Republic shareholders. The
total purchase price amounted to $63.1 million and the acquisition of Republic
was accounted for under the purchase method of accounting. Following the
Republic acquisition, the Company sold the net operating assets of Republic's
hard parts operations in a series of transactions for cash.

  Also during fiscal 1999, the Company acquired the assets of the following
businesses: Unico Corporation and Greenville Unico II Corporation, a
distributor of aftermarket collision replacement parts with operations in
North and South Carolina, in August 1998; Clark Supply Corporation, a
distributor of paint and related supplies doing business in Iowa, in November
1998; California Chrome, a distributor of aftermarket collision replacement
parts with operations in central California, in January 1999; Inventory
Recovery Systems, Inc., a distributor of aftermarket collision replacement
parts with operations in Michigan, in January 1999; 1-800 Used Rim, Inc.. a
distributor of wheels for automobiles and light trucks with operations in
southern California, in March 1999; and Midwest Bumper Company, International
Warehouse Distributing Co., Midwest Bumper Company of Lansing, Collision Parts
Distributors Co. and Carhart Products, Inc., affiliated distributors of
aftermarket collision replacement parts with operations in Michigan, in March
1999. All of these acquisitions were accounted for under the purchase method
of accounting and the consolidated financial statements include the results of
operations for each business for all periods subsequent to the applicable
purchase date.

                                      15
<PAGE>

  During fiscal 2000, the Company acquired certain assets of the following
businesses: Quality Bumpers, LLC, a distributor of plastic and steel bumpers
with operations in Alabama, in May 1999; Nordan Products Division, Inc. and
Nordan Distributors, Inc., distributors of aftermarket collision replacement
parts with operations in Washington and Vancouver, British Columbia, in May
1999; Supreme Bumpers Inc., a distributor of recycled or remanufactured
bumpers in Ohio and Michigan, in October 1999 and Auto Body Supply Co., Inc.,
a distributor of aftermarket collision replacement parts in Pennsylvania, in
November 1999. All of these acquisitions were accounted for under the purchase
method of accounting and the consolidated financial statements include the
results of operations for each business for all periods subsequent to the
applicable purchase date.

Results of Operations

  The following table sets forth, for the periods indicated, certain selected
income statement items as a percentage of net sales.

<TABLE>
<CAPTION>
                                                         Fiscal Year Ended
                                                   -----------------------------
                                                   March 27, March 26, March 31,
                                                     1998      1999      2000
                                                   --------- --------- ---------
   <S>                                             <C>       <C>       <C>
   Net sales......................................   100.0%    100.0%    100.0%
   Cost of sales..................................    56.8      56.1      56.9
                                                     -----     -----     -----
   Gross profit...................................    43.2      43.9      43.1
   Selling and distribution expenses..............    27.9      28.1      29.8
   General and administrative expenses............     6.9       7.5       8.3
   Non-recurring expenses.........................     0.5       0.5       1.0
                                                     -----     -----     -----
   Operating income...............................     8.0       7.8       4.0
   Other income...................................     0.4       1.1       0.7
   Interest expense...............................     0.2       0.0       0.3
                                                     -----     -----     -----
   Income before income taxes.....................     8.2       8.9       4.4
   Income taxes...................................     2.8       3.5       1.8
                                                     -----     -----     -----
   Net income.....................................     5.4%      5.4%      2.6%
                                                     =====     =====     =====
   Pro forma net income(1)........................     4.9%      5.4%      2.6%
                                                     =====     =====     =====
</TABLE>
--------
(1) Pro Forma net income gives effect to an income tax adjustment to reflect
    taxation of the income of Inteuro and Car Body, acquired in January 1998,
    as "C" corporations, rather than "S" corporations, at an estimated
    statutory rate of approximately 39%.

 Fiscal 2000 Compared to Fiscal 1999

  Net sales were $372.5 million in fiscal 2000 compared to $332.0 million in
fiscal 1999, an increase of $40.5 million, or 12.2%. This increase was due
primarily to an increase of $14.3 million in sales of automotive body parts,
an increase of $7.3 million in sales of paint and related materials and an
increase of $15.2 million in sales of new and recycled bumpers, which
represent increases of approximately 9.6%, 14.6% and 14.8%, respectively, over
fiscal 1999. In addition, the Company sold $23.0 million of remanufactured
alloy wheels in fiscal 2000 compared to $17.4 million in the prior fiscal
year, an increase of 32.5%.

  The increased net sales were attributable primarily to an increase in the
number of service centers in operation primarily as a result of acquisitions.
Price increases were not a material factor in increased net sales. On a same
store sales basis, sales were down approximately 1.0% for the year and
approximately 7.0% for the last six months of fiscal 2000, as a result of the
State Farm decision and subsequent actions by certain insurance companies. See
"General" above. Management anticipates recent sales trends may continue for
the foreseeable future, subject to the continuing impact of the State Farm
decision.

                                      16
<PAGE>

  Gross profit increased to $160.6 million (43.2% of net sales) in fiscal 2000
from $145.9 million (43.9% of net sales) in fiscal 1999, an increase of 10.1%,
primarily as a result of the increase in net sales. The Company's gross profit
margin decreased, primarily as a result of higher freight costs with respect
to product shipped from overseas, a shift in product mix as fewer higher
margin collision parts are being written on repair estimates and a write-off
of certain inventories. The Company's gross profit margin has fluctuated, and
is expected to continue to fluctuate, depending on a number of factors,
including changes in product mix, competition and the strength of the United
States dollar relative to the Taiwanese dollar.

  Selling and distribution expenses increased to $111.0 million (29.8% of net
sales) in fiscal 2000 from $93.2 million (28.1% of net sales) in fiscal 1999,
an increase of 19.1%. The increase in these expenses in fiscal 2000 as a
percentage of net sales was generally the result of reduced revenue across the
entire organization as a result of State Farm, Farmers Insurance and
Nationwide restricting usage of aftermarket collision replacement parts. The
Company was staffed in anticipation of a normal winter selling season which
did not materialize. Higher fuel costs during the current fiscal year may
result in increases in selling and distribution expenses as a percentage of
net sales.

  General and administrative expenses increased to $30.8 million (8.3% of net
sales) in fiscal 2000 from $24.9 million (7.5% of net sales) in fiscal 1999,
an increase of 23.7%. The increase in these expenses in fiscal 2000 as a
percentage of net sales resulted from a number of factors, including an
increase in amortization of goodwill and other intangibles. Amortization of
goodwill and other intangibles, as a result of acquisitions, increased to $2.6
million in fiscal 2000 compared to approximately $2.1 million in fiscal 1999,
due to the application of purchase accounting.

  During fiscal 2000, the Company incurred approximately $3.9 million of
nonrecurring expenses as compared to $1.8 million in fiscal 1999. In fiscal
1999, these expenses were the result of a write-off of an abandoned computer
project of $700,000, $650,000 related to consolidating duplicate warehouse
facilities and $450,000 of severance payments. In fiscal 2000, these expenses
were the result of write-downs of goodwill and covenants not to compete
aggregating $3.3 million relating to certain acquisitions and a write-off of
approximately $600,000 relating to tooling acquired in an acquisition.

  During fiscal 2000, other income decreased from $3.6 million to $2.6
million. This decrease is primarily attributable to a decrease in interest
income earned on invested cash.

  As a result of the above factors, net income decreased to $9.8 million (2.6%
of net sales) in fiscal 2000 from $17.8 million (5.4% of net sales) in fiscal
1999.

 Fiscal 1999 Compared to Fiscal 1998

  Net sales were $332.0 million in fiscal 1999 compared to $263.8 million in
fiscal 1998, an increase of $68.2 million, or 25.9%. This increase was due
primarily to an increase of $35.5 million in sales of automotive body parts,
an increase of $9.3 million in sales of paint and related materials and an
increase of $13.0 million in sales of new and recycled bumpers, which
represent increases of approximately 32.0%, 22.6% and 14.2%, respectively,
over fiscal 1998. In addition, the Company sold $17.4 million of
remanufactured alloy wheels in fiscal 1999 compared to $8.4 million in the
prior fiscal year, an increase of 108.7%.

  The increased net sales were attributable primarily to an increase in the
number of service centers in operation as a result of acquisitions and an
increase in unit volume. Price increases were not a material factor in
increased net sales.

  Gross profit increased to $145.9 million (43.9% of net sales) in fiscal 1999
from $113.9 million (43.2% of net sales) in fiscal 1998, an increase of 28.0%,
primarily as a result of the increase in net sales. The Company's gross profit
margin has improved, in part, due to increased purchasing leverage, a direct
result of acquisitions and internal growth. In addition, the United States
dollar has strengthened relative to the Taiwanese dollar,

                                      17
<PAGE>

resulting in lower costs for imported product. The Company imports
approximately 25% of its product from Taiwan, generally, fenders, hoods, door
panels and grilles. The Company's gross profit margin has fluctuated, and is
expected to continue to fluctuate, depending on a number of factors, including
changes in product mix, acquisitions and competition.

  Selling and distribution expenses increased to $93.2 million (28.1% of net
sales) in fiscal 1999 from $73.6 million (27.9% of net sales) in fiscal 1998,
an increase of 26.7%. The increase in these expenses as a percentage of net
sales was generally the result of costs associated with consolidating service
centers and assimilating acquisitions.

  General and administrative expenses increased to $24.9 million (7.5% of net
sales) in fiscal 1999 from $18.1 million (6.9% of net sales) in fiscal 1998,
an increase of 37.4%. The increase in these expenses in fiscal 1999 as a
percentage of net sales resulted from a number of factors, including an
increase in amortization of goodwill and other intangibles. Amortization of
goodwill and other intangibles, as a result of acquisitions, increased to $2.1
million in fiscal 1999 compared to approximately $1.0 million in fiscal 1998,
due to the application of purchase accounting.

  During fiscal 1999, the Company incurred approximately $1.8 million of
nonrecurring expenses. These expenses relate to an approximately $700,000
write-off of an abandoned computer project, approximately $650,000 related to
costs incurred to consolidate duplicate warehouse facilities and approximately
$450,000 related to severance payments.

  During fiscal 1998, the Company expensed $442,000 of costs related to the
Inteuro and Car Body mergers, consisting primarily of legal, accounting and
regulatory fees, the Company incurred approximately $705,000 of costs related
to severance payments to its former Chairman and Chief Executive Officer.

  During fiscal 1999, other income increased to $3.6 million compared to $1.1
million in fiscal 1998. This increase is primarily attributable to interest
income earned on invested cash and to discounts earned for early payments on
purchases.

  As a result of the above factors, net income increased to $17.8 million
(5.4% of net sales) in fiscal 1999 from $14.2 million (5.4% of net sales) in
fiscal 1998.

Variability of Quarterly Results and Seasonality

  The Company has experienced, and expects to continue to experience,
variations in its sales and profitability from quarter to quarter due, in
part, to the timing and integration of acquisitions and the seasonal nature of
Keystone's business. The number of collision repairs is directly impacted by
the weather. Accordingly, the Company's sales generally are highest during the
five-month period from December to April. The impact of seasonality may be
reduced somewhat in the future as Keystone becomes more geographically
diversified. Other factors which influence quarterly variations include the
reduced number of business days during the holiday seasons, the timing of the
introduction of new products, the level of consumer acceptance of new
products, general economic conditions that affect consumer spending, the
timing of supplier price changes and the timing of expenditures in
anticipation of increased sales and customer delivery requirements.

Liquidity and Capital Resources

  The Company's primary need for funds has been to finance the growth of
inventory and accounts receivable and to complete acquisitions. At March 31,
2000, working capital was $86.2 million compared to $105.3 million at March
26, 1999. The decrease in working capital is primarily the result of a
decrease in cash coupled with an increase in inventory. Historically, the
Company has financed its working capital requirements from its cash flow from
operations, proceeds from public offerings of its Common Stock and advances
drawn under lines of credit.

                                      18
<PAGE>

  The Company has in place a revolving line of credit with its commercial
lender that provides for a $30 million unsecured credit facility that expires
on September 15, 2000. Advances under the revolving line of credit bear
interest at LIBOR plus 0.75%-0.875%. At June 16, 2000, $18.3 million had been
drawn down under the line of credit. The line of credit is subject to certain
restrictive covenants set forth in the loan agreement, which requires that the
Company maintain certain financial ratios. The Company was in compliance with
all covenants as of March 31, 2000 and as of the date of filing of this Annual
Report.

  In fiscal 1999, the Company initiated a stock repurchase program. Through
June 16, 2000, an aggregate of 3.5 million shares had been repurchased for
$45.6 million, an average of $13.11 per share.

  During fiscal 2000, the Company's cash and cash equivalents decreased by
$14.9 million. This decrease is the result of (i) an increase in cash provided
by operating activities of $17.4 million from a variety of sources, primarily
net income; (ii) a decrease in cash used in investing activities of $18.1
million, primarily as a result of cash used to complete acquisitions and
implement the Company's enterprise software package; and (iii) a decrease in
cash provided by financing activities of $14.2 million, primarily as a result
of the elimination of Republic's outstanding bank indebtedness and the
repurchase of shares of the Company's Common Stock, offset in part by paydowns
with respect to the Company's borrowings.

  The Company believes that its existing working capital, estimated cash flow
from operations and funds available under its line of credit will enable it to
finance its operations and stock repurchases for at least the next 12 months.

Inflation

  The Company does not believe that the relatively moderate rates of inflation
over the past three years have had a significant effect on its net sales or
its profitability.

New Accounting Standards

  In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133--"Accounting for
Derivative Instruments and Hedging Activities," which establishes accounting
and reporting standards for derivative instruments and hedging activities. It
requires that an entity recognize all derivatives in the statement of
financial position and measure those instruments at fair value. In 1999, the
FASB issued SFAS No. 137--"Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133--an
amendment of FASB Statement No. 133," for one year. The Company must implement
SFAS No. 133 by the first quarter of 2001 and has not yet made a final
determination of its impact on the financial statements.

  In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial
Statements. The effective date of SAB 101 is the first fiscal quarter of the
fiscal year beginning after December 15, 1999. The Company plans on applying
SAB 101 effective April 1, 2000, however, it does not expect that the
application of SAB 101 will have a significant impact on its results of
operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

  The Company's results of operations are exposed to changes in interest rates
primarily with respect to borrowings under its credit facility, where interest
rates are tied to the prime rate or LIBOR. Under its current policies, the
Company does not use interest rate derivative instruments to manage exposure
to interest rate changes. Based on the current levels of debt, the exposure to
interest rate fluctuations is not considered to be material. The Company is
also exposed to currency fluctuations, primarily with respect to its product
purchases in Taiwan. While all transactions with Taiwan are conducted in U.S.
Dollars, changes in the relationship between the U.S. dollar and New Taiwan
dollars might impact the price of products purchased in Taiwan. The Company
might not be able to pass on any price increases to customers. Under its
present policies, the Company does not attempt to hedge its currency exchange
rate exposure.

                                      19
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         INDEX TO FINANCIAL STATEMENTS

                      KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

<TABLE>
<S>                                                                        <C>
Report of Independent Auditors............................................  21
Consolidated Balance Sheets at March 31, 2000 and March 26, 1999..........  22
Consolidated Statements of Income for the years ended March 31, 2000,
 March 26, 1999 and March 27, 1998........................................  23
Consolidated Statements of Shareholders' Equity for the years ended March
 31, 2000, March 26, 1999 and March 27, 1998..............................  24
Consolidated Statements of Cash Flows for the years ended March 31, 2000,
 March 26, 1999 and March 27, 1998........................................  25
Notes to Consolidated Financial Statements................................  26
</TABLE>


                                       20
<PAGE>

                        REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Keystone Automotive Industries, Inc.

  We have audited the accompanying consolidated balance sheets of Keystone
Automotive Industries, Inc. and subsidiaries as of March 31, 2000 and March
26, 1999, and the related consolidated statements of income, shareholders'
equity, and cash flows for each of the three years in the period ended March
31, 2000. Our audits also included the financial statement schedule listed in
the index at 14(a). These financial statements and the financial statement
schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

  We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

  In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Keystone
Automotive Industries, Inc. at March 31, 2000 and March 26, 1999, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended March 31, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects the information set forth therein.

                                          /s/ Ernst & Young LLP

Los Angeles, California
May 24, 2000


                                      21
<PAGE>

                      KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

                          CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                             March 31,  March 26,
                                                               2000       1999
                                                             ---------  ---------
<S>                                                          <C>        <C>
                          ASSETS
                          ------
Current assets:
 Cash and cash equivalents.................................  $  2,884   $ 17,784
 Accounts receivable, less allowance for doubtful accounts
  of $1,145 in 2000 and $962 in 1999.......................    27,644     30,256
 Inventories, primarily finished goods.....................    80,176     72,284
 Prepaid expenses and other current assets.................     3,650      7,956
 Deferred taxes............................................     3,667      3,601
                                                             --------   --------
     Total current assets..................................   118,021    131,881
Property, plant and equipment, at cost:
 Land......................................................       519        519
 Buildings and leasehold improvements......................    10,086      9,465
 Machinery and equipment...................................    23,759     17,288
 Furniture and fixtures....................................    11,616     10,568
                                                             --------   --------
                                                               45,980     37,840
 Accumulated depreciation and amortization.................   (22,391)   (18,473)
                                                             --------   --------
                                                               23,589     19,367
Goodwill, net of accumulated amortization of $3,274 in 2000
 and $1,583 in 1999........................................    35,204     36,262
Other intangibles, net of accumulated amortization of
 $3,123 in 2000 and $2,167 in 1999.........................     1,647      1,874
Other assets...............................................     2,242      2,664
Deferred taxes.............................................     3,114      2,046
                                                             --------   --------
     Total assets..........................................  $183,817   $194,094
                                                             ========   ========
           LIABILITIES AND SHAREHOLDERS' EQUITY
           ------------------------------------
Current liabilities:
 Credit facility...........................................  $ 12,500   $    --
 Bankers acceptances.......................................       --       2,961
 Accounts payable..........................................    12,693     14,859
 Accrued salaries, wages and related benefits..............     5,098      3,621
 Other accrued liabilities.................................     1,461      4,141
 Long-term debt, due within one year.......................       117        200
 Deferred taxes............................................       --         769
                                                             --------   --------
     Total current liabilities.............................    31,869     26,551
Long-term debt, less current maturities....................        68        100
Other long-term liabilities................................     1,685      2,679
Deferred taxes.............................................       --       1,559
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--14,892,000 in 2000 and
    16,858,000 in 1999, at stated value....................    81,817    105,436
 Warrant...................................................       236        --
 Additional paid-in capital................................     1,260      1,223
 Retained earnings.........................................    66,882     57,073
 Accumulated other comprehensive loss......................       --        (527)
                                                             --------   --------
     Total shareholders' equity............................   150,195    163,205
                                                             --------   --------
     Total liabilities and shareholders' equity............  $183,817   $194,094
                                                             ========   ========
</TABLE>

                            See accompanying notes.

                                       22
<PAGE>

                      KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

                       CONSOLIDATED STATEMENTS OF INCOME
               (in thousands, except per share and share amounts)

<TABLE>
<CAPTION>
                                                     Year ended
                                         -------------------------------------
                                          March 31,    March 26,    March 27,
                                            2000         1999         1998
                                         -----------  -----------  -----------
<S>                                      <C>          <C>          <C>
Net sales..............................  $   372,466  $   332,047  $   263,802
Cost of sales..........................      211,840      186,150      149,855
                                         -----------  -----------  -----------
Gross profit...........................      160,626      145,897      113,947
Operating expenses:
  Selling and distribution.............      110,976       93,169       73,551
  General and administrative...........       30,800       24,873       18,101
  Non-recurring........................        3,881        1,814        1,147
                                         -----------  -----------  -----------
                                             145,657      119,856       92,799
                                         -----------  -----------  -----------
Operating income.......................       14,969       26,041       21,148
Other income...........................        2,613        3,617        1,086
Interest expense.......................         (954)         (50)        (504)
                                         -----------  -----------  -----------
Income before income taxes.............       16,628       29,608       21,730
Income taxes...........................        6,819       11,843        7,497
                                         -----------  -----------  -----------
Net income.............................  $     9,809  $    17,765  $    14,233
                                         ===========  ===========  ===========
Net income per share--basic............  $      0.62  $      1.06  $      1.02
                                         ===========  ===========  ===========
Weighted average common shares
 outstanding--basic....................   15,899,000   16,784,000   13,915,000
                                         -----------  -----------  -----------
Net income per share--diluted..........  $      0.62  $      1.05  $      1.01
                                         ===========  ===========  ===========
Weighted average common shares
 outstanding--diluted..................   15,917,000   16,913,000   14,105,000
                                         ===========  ===========  ===========

(unaudited pro forma information) (Note
 2)

Net income, as previously reported.....  $     9,809  $    17,765  $    14,233
Pro forma tax adjustment...............          --           --        (1,345)
                                         -----------  -----------  -----------
Pro forma net income...................        9,809  $    17,765  $    12,888
                                         ===========  ===========  ===========
Pro forma net income per share--basic..  $      0.62  $      1.06  $      0.93
                                         ===========  ===========  ===========
Pro forma net income per share--
 diluted...............................  $      0.62  $      1.05  $      0.91
                                         ===========  ===========  ===========
</TABLE>

                            See accompanying notes.

                                       23
<PAGE>

                      KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
               (in thousands, except per share and share amounts)

<TABLE>
<CAPTION>
                                                                             Accumulated
                             Common Stock              Additional               Other
                          -------------------           Paid-in   Retained  Comprehensive
                            Shares    Amount   Warrant  Capital   Earnings      Loss       Total
                          ----------  -------  ------- ---------- --------  ------------- --------
<S>                       <C>         <C>      <C>     <C>        <C>       <C>           <C>
Balance at March 28,
 1997...................  11,750,000  $15,923   $ --     $  582   $29,948       $ --      $ 46,453
Net adjustment for
 pooled companies for
 the quarter ended March
 31, 1997...............         --       --      --        --     (2,072)        --        (2,072)
Issuance of stock, net
 of offering costs of
 $2,679.................   2,610,000   37,776     --        --        --          --        37,776
Issuance of stock in
 connection with
 acquisition of All
 Makes at $12.75 per
 share..................     235,000    2,991     --        --        --          --         2,991
Stock options
 exercised..............      47,000      506     --        --        --          --           506
Tax benefit of stock
 options exercised......         --       --      --        142       --          --           142
S-Corp. distributions by
 pooled companies.......         --       --      --        --     (2,801)        --        (2,801)
Net income..............         --       --      --        --     14,233         --        14,233
                          ----------  -------   -----    ------   -------       -----     --------
Balance at March 27,
 1998...................  14,642,000   57,196     --        724    39,308         --        97,228
Net income..............         --       --      --        --     17,765         --        17,765
Defined benefit plan
 funding adjustments net
 of taxes of $363.......         --       --      --        --        --         (527)        (527)
                                                                                          --------
Comprehensive income....                                                                    17,238
Issuance of stock in
 connection with
 acquisition of
 Collision Parts
 Distributor Co. at
 $12.19 per share.......     150,000    1,828     --        --        --          --         1,828
Issuance of stock in
 connection with
 acquisition of Republic
 Automotive at $21.69
 per share..............   2,907,000   63,063     --        --        --          --        63,063
Stock options
 exercised..............     168,000    2,188     --        --        --          --         2,188
Tax benefit of stock
 options exercised......         --       --      --        499       --          --           499
Repurchase of common
 stock..................  (1,009,000) (18,839)    --        --        --          --       (18,839)
                          ----------  -------   -----    ------   -------       -----     --------
Balance at March 26,
 1999...................  16,858,000  105,436     --      1,223    57,073        (527)     163,205
Net income..............         --       --      --        --      9,809         --         9,809
Defined benefit plan
 funding adjustments net
 of taxes of $363.......         --       --      --        --        --          527          527
                                                                                          --------
Comprehensive income....                                                                    10,336
Issuance of warrant.....         --       --      236       --        --          --           236
Stock options
 exercised..............      11,000      103     --        --        --          --           103
Tax benefit of stock
 options exercised......         --       --      --         37       --          --            37
Repurchases of common
 stock..................  (1,977,000) (23,722)    --        --        --          --       (23,722)
                          ----------  -------   -----    ------   -------       -----     --------
Balance at March 31,
 2000...................  14,892,000  $81,817   $ 236    $1,260   $66,882       $ --      $150,195
                          ==========  =======   =====    ======   =======       =====     ========
</TABLE>

                            See accompanying notes.

                                       24
<PAGE>

                      KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                            Year ended
                                                   -----------------------------
                                                   March 31, March 26, March 27,
                                                     2000      1999      1998
                                                   --------- --------- ---------
<S>                                                <C>       <C>       <C>
Operating activities
 Net income......................................   $ 9,809   $17,765   $14,233
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation and amortization.................     4,607     4,318     3,188
   Amortization of goodwill and other
    intangibles..................................     2,649     2,050       967
   Deferred taxes................................    (3,462)      679      (618)
   Loss on impairment............................     3,881       --        --
   Provision for losses on uncollectible
    accounts.....................................       127       601       372
   Provision for losses on inventory.............        19       251       495
   Loss on sales of assets.......................         5        27        76
   Changes in operating assets and liabilities:
     Accounts receivable.........................     3,701    (2,305)   (2,886)
     Inventories.................................    (5,429)   (1,151)   (8,031)
     Prepaid expenses and other current assets...       433    (1,949)     (692)
     Accounts payable............................    (2,236)      521    (7,613)
     Accrued salaries, wages and related
      benefits...................................     3,314    (2,286)     (332)
     Other accrued liabilities...................    (3,110)     (532)    1,910
     Other, net..................................     3,115       624      (620)
                                                    -------   -------   -------
      Net cash provided by operating activities..    17,423    18,613       449
Investing activities
 Proceeds from sales of assets...................       232    42,629       213
 Acquisitions of certain service centers, net of
  cash received..................................    (9,615)  (12,517)   (7,048)
 Purchases of property, plant and equipment......    (8,745)   (5,126)   (3,790)
                                                    -------   -------   -------
      Net cash (used in) provided by investing
       activities................................   (18,128)   24,986   (10,625)
Financing activities
 Borrowings under bank credit facility...........    12,500       --        --
 Payments under bank credit facility.............       --    (20,000)  (12,629)
 Bankers acceptances.............................    (2,961)    1,109    (1,686)
 Payments on notes payable to officers,
  shareholders and other related parties.........       --        --        (42)
 Principal payments on long-term debt............      (115)   (1,133)   (1,892)
 S-Corp. distributions related to pooled
  companies......................................       --        --     (2,801)
 Proceeds from initial public and secondary
  offering.......................................       --        --     37,776
 Purchase of common stock........................   (23,722)  (18,839)      --
 Proceeds from stock option exercises............       103     2,189       506
                                                    -------   -------   -------
      Net cash (used in) provided by financing
       activities................................   (14,195)  (36,674)   19,232
                                                    -------   -------   -------
Net (decrease) increase in cash and cash
 equivalents.....................................   (14,900)    6,925     9,056
Cash and cash equivalents at beginning of year...    17,784    10,859     2,284
Net change in cash and cash equivalents during
 the quarter ended March 31, 1997 for pooled
 companies.......................................       --        --      (481)
                                                    -------   -------   -------
Adjusted cash and cash equivalents at beginning
 of year.........................................    17,784    10,859     1,803
                                                    -------   -------   -------
Cash and cash equivalents at end of year.........   $ 2,884   $17,784   $10,859
                                                    =======   =======   =======
Supplemental disclosures:
 Interest paid during the year...................   $   847   $   242   $   585
 Income taxes paid during the year...............     6,607    11,655     6,346
 Acquisition of businesses using debt............       --        150       --
 Acquisition of businesses using stock...........       --     64,891     2,991
The following item is not included in the
 Consolidated Statement of Cash Flows:
 Minimum pension liability adjustment............   $  (527)  $   527   $   --
 Issuance of warrant.............................       236       --        --
</TABLE>

                            See accompanying notes.

                                       25
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                March 31, 2000

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

  The accompanying consolidated financial statements include the accounts of
Keystone Automotive Industries, Inc. and its wholly owned subsidiaries (the
"Company"). Significant subsidiaries included in the consolidated financial
statements include North Star Plating Company ("North Star"), Inteuro Parts
Distributors, Inc. ("Inteuro") and Republic Automotive Parts, Inc.
("Republic"). All significant intercompany transactions have been eliminated
in consolidation.

Business Information

  The principal business of the Company is the distribution of replacement
parts for automobiles and light trucks to collision repair shops through a
network of service centers located within the United States, one in Mexico,
and one in Canada.

Fiscal Year

  The Company uses a 52/53 week fiscal year. The Company's fiscal year ends on
the last Friday of March. The fiscal year ended March 31, 2000 included 53
weeks. The fiscal years ended March 26, 1999 and March 27, 1998 each included
52 week periods.

Accounting Estimates

  The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from these estimates.

Concentrations of Risk

  Accounts receivable subject the Company to a potential concentration of
credit risk. Substantially all of the Company's customers are in the auto body
repair business, none representing more than 1% of sales. The Company performs
periodic credit evaluations of its customers' financial condition and
generally does not require collateral. Receivables are generally due within 30
days. Credit losses have consistently been within management's expectations.

  During 2000 and 1999, the Company imported 20% and 25% of its products from
the Far East, respectively.

Fair Values of Financial Instruments

  Fair values of cash and cash equivalents, accounts receivable, accounts
payable, bankers acceptances and other short-term obligations approximate cost
due to the short period of time to maturity. Fair values of long-term debt,
which have been determined based on borrowing rates currently available to the
Company for loans with similar terms or maturity, approximate the carrying
amounts in the consolidated financial statements.

Cash Equivalents

  The Company considers all highly liquid instruments with an original
maturity of three months or less when purchased to be cash equivalents. Cash
and cash equivalents are held by major financial institutions.

                                      26
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Inventories

  The Company's inventories consist primarily of automotive after market
collision replacement parts, paint and related items and bumpers. Inventories
are stated at the lower of cost (first-in, first-out method) or market.

Long-Lived Assets

  The Company reviews the reasonability of its long-lived assets, including
goodwill, as required by Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of," whenever significant events or changes occur
which might impair the recovery of the recorded costs. The Company records
impairment losses on long-lived assets held and used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than their related carrying amounts.
If impairment exists, the amount of such impairment is calculated based upon
discounted cash flows or the market values compared to the recorded costs. In
addition, the Company accounts for its long-lived assets to be disposed of at
the lower of their carrying amounts or fair value less selling and disposal
costs.

  During fiscal 2000, the Company recorded an impairment reserve related to
goodwill and covenants not to compete aggregating $3.3 million relating to
certain acquisitions and an impairment reserve of approximately $600,000
relating to tooling acquired in an acquisition.

Depreciation and Amortization

  The Company uses the straight-line method for calculating depreciation and
amortization of property, plant, and equipment over the following estimated
useful lives:

<TABLE>
      <S>                       <C>
      Buildings...............  20 years
      Machinery and
       equipment..............  5-12 years
      Furniture and fixtures..  5-7 years
      Auto and truck..........  3-5 years
      Leasehold improvements..  Term of lease or life of the asset, whichever is shorter
</TABLE>

Goodwill and Other Intangibles

  Goodwill, representing the excess of the purchase price over the fair values
of the net assets of acquired entities, is amortized over 15 to 30 years using
the straight-line method. Other intangibles are comprised of covenants not to
compete. Covenants not to compete are amortized using the straight-line method
over the terms of the agreements, generally 3-5 years.

Investment

  In November 1999, the Company made an investment in GoMedia, Inc., a company
which has developed an online business community, goClaims.com, addressing the
automotive collision repair and claims processing market. The Company is
accounting for its investment ($795,000) using the cost method of accounting.

Revenue Recognition

  The Company recognizes revenue from product sales at the time of delivery or
shipment. The Company provides its customers the right to return products that
are damaged or defective. The effect of these programs is estimated and
current period sales and costs of sales are reduced accordingly.

                                      27
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Stock-Based Compensation

  The Company elected to continue to account for stock-based compensation
plans using the intrinsic value-based method of accounting prescribed by
Accounting Principles Board Opinion (APB) No. 25, "Accounting for Stock Issued
to Employees," and related interpretations. Under the provisions of APB No.
25, compensation expense is measured at the grant date for the difference
between the fair value of the stock and the exercise price. The Company has
not granted stock options at less than the fair value of the stock at the date
of grant.

New Accounting Standards

  In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which establishes accounting
and reporting standards for derivative instruments and hedging activities. It
requires that an entity recognize all derivatives in the statement of
financial position and measure those instruments at fair value. In 1999, the
FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133--an
amendment of FASB Statement No. 133," which defers the effective date of SFAS
No. 133 for one year. The Company must implement SFAS No. 133 by the first
quarter of 2001 and has not yet made a final determination of its impact on
the financial statements.

  In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements." The effective date of SAB 101 is the first fiscal quarter of the
fiscal year beginning after December 15, 1999. The Company plans to apply SAB
101 effective April 1, 2000; however, the Company does not expect the
application of SAB 101 to have a significant impact on its results of
operations.

2. ACQUISITIONS

  In June 1998, the Company completed its acquisition of Republic. The Company
issued approximately 2,907,000 shares of its common stock in exchange for the
outstanding common stock of Republic (total purchase price of approximately
$63.1 million using an average share price of $21.69). The fair value of the
assets acquired approximated $41.9 million, net of approximately $28.8 million
of liabilities assumed. The excess of the purchase price over assets acquired
(goodwill) approximated $21.2 million and is being amortized over 30 years.
The acquisition of Republic is being accounted for under the purchase method
of accounting. At the time of the acquisition, Republic was engaged in the
distribution of automotive mechanical hard parts and aftermarket collision
replacement parts.

  The net assets acquired as part of the Republic transaction, which related
to the Republic mechanical hard parts operations, were recorded as assets held
for sale in the allocation of the opening balance sheet at June 27, 1998. The
assets held for sale were recorded at fair value based upon the final sales
price. The results of operations from June 27, 1998 through the date of sale
of the mechanical hard parts operations were accounted for as an adjustment to
the carrying amount of the assets. The assets held for sale were sold in a
series of transactions during fiscal 1999, which resulted in a gain. The gain
on sales has been accounted for as an adjustment of the original purchase
price. The operating results of the Company from June 27, 1998, excluded any
effects from the mechanical hard parts business.

                                      28
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The unaudited pro forma results of operations for the year ended March 26,
1999 and March 27, 1998, as though Republic had been combined with the Company
at the beginning of fiscal 1998, is as follows (in thousands, except share and
per share amounts):

<TABLE>
<CAPTION>
                                                          March 26,   March 27,
                                                            1999        1998
                                                         ----------- -----------
   <S>                                                   <C>         <C>
   Net sales............................................ $   347,346     319,927
   Net income........................................... $    17,325      15,080
   Net income per share................................. $       .98         .89
   Weighted average shares outstanding diluted..........  17,649,000  17,012,000
</TABLE>

  In addition to the Republic acquisition, Keystone acquired six other
companies for approximately $17.8 million cash, $1.8 million in stock and a
note payable of $150,000. These acquisitions were accounted for as purchases,
and accordingly the assets and liabilities of the acquired entities have been
recorded at their estimated fair values at the dates of acquisition. The
excess of purchase price over the estimated fair values of the assets acquired
was approximately $9.9 million and has been recorded as goodwill and is being
amortized over 15 to 20 years. The unaudited proforma results for fiscal 1998
and 1999, assuming these other acquisitions had been made at the beginning of
fiscal 1998, would not be materially different from the pro forma results
presented above.

  Effective January 1, 1998, Inteuro merged with and into the Company. An
aggregate of 2,000,000 shares of the Company's common stock were issued in
exchange for all of the issued and outstanding common stock of Inteuro.  This
transaction was accounted for as a pooling of interests and therefore, all
prior period financial statements presented include Inteuro's historical
activities. Inteuro used a December 31 year end. The Company's financial
statements for fiscal 1998 combine the Company's consolidated financial
statements for the year ended March 27, 1998, with Inteuro's financial
statements for year ended December 31, 1997.

  For the quarter ended March 28, 1997, net income for Inteuro was $385,000,
offset by S-Corp. distributions of $2,457,000, resulting in a net adjustment
to retained earnings of $2,072,000. Revenue and expenses of $9,164,000 and
$8,779,000, respectively, were recorded for the quarter ended March 28, 1997
for Inteuro which have not been reflected in the statement of operations.

  Prior to the merger, the net income of Inteuro had been taxed under
subchapter "S" of the Internal Revenue Code, and therefore, did not reflect
the corporate tax liability that was passed through to its shareholders. The
proforma net income and earnings per share included herein reflect income tax
expense of the combined companies at an estimated statutory rate of 39%.

  In connection with the merger with Inteuro, $442,000 of merger costs and
expenses were incurred and have been charged to operations for the year ended
and March 27, 1998. The merger costs and expenses consisted primarily of
legal, accounting, and investment banking fees.

3. GOODWILL AND OTHER INTANGIBLES

  Goodwill increased approximately $1,088,000, net of impairment losses
recorded during fiscal 2000. Amortization expense for goodwill and other
intangibles for the years ended March 31, 2000, March 26, 1999 and March 27,
1998 was $2,649,000, $2,050,000 and $967,000, respectively, and is included
with depreciation and amortization expense.

                                      29
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


4. FINANCING ARRANGEMENTS

  The Company maintains a revolving line of credit with a commercial lender
that provides a $30,000,000 unsecured credit facility that expires, as
amended, in September 2000. Initial advances under the revolving line of
credit are made with interest at the lender's prime rate; however, at the
Company's option, all advances may be converted to LIBOR plus 0.75%--0.875%.
The agreement also contains an unused line charge of 0.125%. At March 31,
2000, $12,500,000 was outstanding under the line of credit. The loan agreement
is subject to certain restrictive covenants and requires that the Company
maintain certain financial ratios. The Company was in compliance with all
covenants as of March 31, 2000.

5. SHAREHOLDERS' EQUITY

  In June 1996, the Company completed its initial public offering of 1,500,000
shares at an offering price of $9.00 per share, which generated net proceeds
of $11,622,000. In June 1997, the Company's Registration Statement on Form S-1
was declared effective by the Securities and Exchange Commission, permitting
the Company to sell additional shares of its common stock to the public. The
Company and selling shareholders sold 2,610,000 shares each, at an offering
price of $15.50 per share, which generated net proceeds to the Company of
$37,776,000 (net of underwriter commissions and offering costs). The Company's
proceeds from both offerings were used to pay down bank debt, to fund
acquisitions and for working capital. Additionally, in August 1997, the
Company amended its Articles of Incorporation to increase its authorized
shares of common stock to 50,000,000.

  In June 1998, as part of the Company's acquisition of Republic, the Company
issued approximately 2,907,000 shares using an average share price of $21.69.

  In September 1998, the Board of Directors authorized the Company to purchase
up to 1,000,000 shares of its common stock at such times and at such prices as
the President and Chief Financial Officer deemed appropriate. Repurchased
shares were redeemed and treated as authorized but unissued shares. At March
26, 1999, the Company had repurchased approximately 1,009,000 shares of its
common stock at an average cost of $18.67 per share.

  In March 1999, the Company issued 150,000 shares of unregistered stock using
an average share price of $12.19 to acquire Collision Parts Distributors Co.

  In February 2000, the Company issued a warrant to purchase 100,000 shares of
the Company's stock, at an exercise price of $6.50 per share to a vendor. The
warrant is exercisable starting in February 2001 through 2005, or through the
date of dissolution of the agreement. Using the intrinsic value method, the
Company recorded the warrant in Shareholders' equity at $236,000 and will
amortize the expense over the period services are received from the vendor.

                                      30
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


6. EARNINGS PER SHARE

  In 1997, the FASB issued SFAS No. 128, "Earnings Per Share." SFAS No. 128
replaced the calculation of primary and fully diluted earnings per share with
basic and diluted earnings per share. Unlike primary earnings per share, basic
earnings per share excludes any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. All earnings per share
amounts for all periods have been presented and, where appropriate, restated
to conform to the SFAS No. 128 requirements. The following table sets forth
the computation of basic and diluted earnings per share:

<TABLE>
<CAPTION>
                                                          Year ended
                                                 -----------------------------
                                                 March 31, March 26, March 27,
                                                   2000      1999      1998
                                                 --------- --------- ---------
                                                  (in thousands, except share
                                                    and per share amounts)
   <S>                                           <C>       <C>       <C>
   Numerator:
     Net income.................................  $ 9,809   $17,765   $14,233
                                                  -------   -------   -------
   Denominator:
     Denominator for basic earnings per share--
      weighted average
      shares....................................   15,899    16,784    13,915
                                                  -------   -------   -------
   Effect of dilutive securities:
     Employee stock options.....................       18       129       190
     Denominator for dilutive earnings per
      share--adjusted weighted average shares
      and assumed conversions...................   15,917    16,913    14,105
                                                  -------   -------   -------
   Basic earnings per share.....................  $  0.62   $  1.06   $  1.02
                                                  =======   =======   =======
   Diluted earnings per share...................  $  0.62   $  1.05   $  1.01
                                                  =======   =======   =======
</TABLE>

  The warrant to purchase 100,000 shares had an exercise price greater than
the average market price of common stock at March 31, 2000, and therefore was
excluded from the computation of diluted earnings per share because the effect
would be an antidilutive.

7. RELATED PARTY TRANSACTIONS

  The Company has entered into various property lease agreements with related
parties, including certain of the Company's directors and officers and
agreements with a corporation which is owned by a family member of a Company
officer and director. The leases contain terms up to 10 years. The Company
believes that the terms and conditions of such leases with affiliated parties
are no less favorable than could have been obtained from unaffiliated parties
in arm's length transactions at the time such leases were entered into. Rent
expense for related party lease agreements, included in the total rent
expense, amounted to $1,373,000, $1,863,000 and $1,715,000 for 2000, 1999 and
1998, respectively, exclusive of the Company's obligation for property taxes
and insurance.

                                      31
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


8. INCOME TAXES

  The liability method is used in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on
differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

  Significant components of the Company's deferred tax liabilities and assets
are as follows:

<TABLE>
<CAPTION>
                                                            March 31, March 26,
                                                              2000      1999
                                                            --------- ---------
                                                              (in thousands)
   <S>                                                      <C>       <C>
   Deferred tax assets:
     Uniform cost capitalization...........................  $1,423    $ 1,331
     Goodwill..............................................   2,542      1,183
     Inventory reserve.....................................     643        594
     Accrued expenses not currently deductible for tax.....   2,021      2,234
     Other, net............................................     196        305
                                                             ------    -------
       Total deferred tax assets...........................   6,825      5,647
   Deferred tax liabilities:
     Prepaid expenses......................................     (44)      (769)
     Tax depreciation over book............................     --        (488)
     Book/tax difference on pension accrual................     --      (1,071)
                                                             ------    -------
       Total deferred tax liabilities......................     (44)    (2,328)
                                                             ------    -------
       Net deferred tax assets.............................  $6,781    $ 3,319
                                                             ======    =======
</TABLE>

  Significant components of the provision for income taxes attributable to
operations under the liability method are as follows:

<TABLE>
<CAPTION>
                                                            Year ended
                                                   -----------------------------
                                                   March 31, March 26, March 27,
                                                     2000      1999      1998
                                                   --------- --------- ---------
                                                          (in thousands)
   <S>                                             <C>       <C>       <C>
   Current:
     Federal......................................  $ 8,512   $ 7,136   $6,575
     State........................................    1,769     1,984    1,540
                                                    -------   -------   ------
                                                     10,281     9,120    8,115
   Deferred:
     Federal......................................   (3,090)    1,792     (514)
     State........................................     (372)      931     (104)
                                                    -------   -------   ------
                                                     (3,462)    2,723     (618)
                                                    -------   -------   ------
                                                     $6,819   $11,843   $7,497
                                                    =======   =======   ======
</TABLE>

  Prior to the purchase of Inteuro by the Company on January 1, 1998, Inteuro
had elected to be treated as an S corporation under the provisions of the
Internal Revenue Code. Accordingly, taxable income of Inteuro has been
reported in the tax returns of the individual shareholders of Inteuro.
Subsequent to the acquisition of Inteuro on January 1, 1998, the operating
results of Inteuro are included in the consolidated federal and state tax
returns of the Company.

                                      32
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The reconciliation of income taxes at the U.S. federal statutory tax rate to
reported income tax expense is as follows:

<TABLE>
<CAPTION>
                                                          Year ended
                                                 -----------------------------
                                                 March 31, March 26, March 27,
                                                   2000      1999      1998
                                                 --------- --------- ---------
                                                        (in thousands)
   <S>                                           <C>       <C>       <C>
   Income taxes at statutory tax rate...........  $5,821    $10,363   $ 7,606
   State income taxes, net of federal tax
    effect......................................     710      1,229       915
   S-Corp. earnings of Inteuro..................     --         --     (1,221)
   Non-deductible expenses......................     288        251       197
                                                  ------    -------   -------
                                                  $6,819    $11,843   $ 7,497
                                                  ======    =======   =======
</TABLE>

9. EMPLOYEE BENEFIT PLANS

  The Company terminated its employee stock ownership plan which covers
substantially all of its employees. Final payout is expected to occur during
fiscal 1999. Under the terms of the Internal Revenue Code, each year's tax
deductible contribution is limited to a maximum of 15% of the Company's
qualified payroll. A carryover of unused allowable contributions is allowed,
subject to certain limits. Under the terms of the plan, the Company makes the
contribution to the Trustee, who is required to follow the Administrative
Committee's investment decisions. There were no Company contributions to the
plan in fiscal 1997, 1998 nor 1999.

  In March 1979, the Company adopted a defined benefit pension plan (the
"Plan") to provide pension benefits to all non-union employees. Plan benefits
are based on an employee's years of service and the compensation during the
five years of employment which would yield the highest average compensation.
Effective in April 1997, the Company suspended the accrual of future benefits
resulting in a curtailment gain of $427,000. The curtailment gain was used to
offset unrecognized net losses of the Plan. The assets of the Plan consist
primarily of investments in mutual funds, time certificates of deposit, and
marketable debt securities. The Company's policy is to fund pension cost
accrued.

  In June 1998, the Company acquired Republic, including its pension and
postretirement life and health insurance plans ("Health and Life Plans").
Republic's defined benefit plan covers substantially all employees. Benefits
under this plan generally are based upon the employee's years of service and
compensation preceding retirement. The Company's general funding policy is to
contribute amounts deductible for federal income taxes. Under the Health and
Life Plans, the Company contributes toward the cost of health insurance
benefits for certain retired employees. In order to be eligible for
postretirement health insurance coverage, an employee must retire after
attainment of age 55 and completion of 10 years of service, or attainment of
age 50 and completion of 15 years of service. After attainment of age 65, the
employee will not be eligible for coverage under the health insurance plan. In
order to be eligible for life insurance benefits, an employee must retire
after attaining age 55 and completing 10 years of service, or attaining age 50
and completing 15 years of service. Eligible retirees will receive a life
insurance benefit of $2,500 for which the Company pays the full cost. The
Health and Life Plans are unfunded and therefore, premiums are paid from the
Company's current operations.

                                      33
<PAGE>

                      KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The net periodic pension cost for all the Company's benefit plans was as
follows:

<TABLE>
<CAPTION>
                                    Pension Benefits          Other Benefits
                              ----------------------------- -------------------
                              March 31, March 26, March 27, March 31, March 26,
                                2000      1999      1998      2000      1999
                              --------- --------- --------- --------- ---------
                                               (in thousands)
<S>                           <C>       <C>       <C>       <C>       <C>
Service cost................    $  67     $ 281     $  18      $ 5       $11
Interest cost...............      485       424       271       87        58
Amortization or unrecognized
 transition obligation or
 asset......................       --        --       120       --        --
Recognized gains or
 (losses)...................     (193)       29       489       --        --
Prior service cost
 recognized.................      130        --      (143)      --        --
Expected return on assets...     (284)     (500)     (224)      --        --
Gain or loss due to
 settlement or curtailment..       --        --      (427)      --        --
                                -----     -----     -----      ---       ---
                                $ 205     $ 234     $ 104      $92       $69
                                =====     =====     =====      ===       ===
</TABLE>

                                       34
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The following is a summary of the status of the funding of the plans:

<TABLE>
<CAPTION>
                                         Pension Benefits     Other Benefits
                                        ------------------- -------------------
                                        March 31, March 26, March 31, March 26,
                                          2000      1999      2000      1999
                                        --------- --------- --------- ---------
                                                    (in thousands)
<S>                                     <C>       <C>       <C>       <C>
Change in benefit obligation:
  Benefit obligation at beginning of
   year...............................   $ 8,140   $ 2,752   $ 1,107   $   --
  Benefit obligation from acquired
   company............................       --      4,311       --      1,235
  Service cost........................        67       281         5        11
  Interest cost.......................       485       424        87        58
  Plan participants' contributions....       --        --         12        13
  Actuarial losses (gains)............       (87)      690       (49)      (94)
  Settlement loss.....................       671       --        --        --
  Benefits paid.......................    (3,121)   (1,048)      (94)     (116)
  Plan amendments.....................      (324)      --        --        --
  Change in assumptions...............    (1,769)      730       --        --
                                         -------   -------   -------   -------
    Benefit obligation at end of
     year.............................   $ 4,062   $ 8,140   $ 1,068   $ 1,107
                                         =======   =======   =======   =======
Change in plan assets:
  Fair value of plan assets at
   beginning of year..................   $ 6,464   $ 3,015   $   --    $   --
  Actual return on plan assets........       284        26       --        --
  Acquisition.........................       --      4,266       --        --
  Company contributions...............       --        205       --        --
  Benefits paid.......................    (3,121)   (1,048)      --        --
                                         -------   -------   -------   -------
    Fair value of plan assets at end
     of year..........................   $ 3,627   $ 6,464   $   --    $   --
                                         =======   =======   =======   =======
Funded status:
  Funded status of the plan
   (underfunded)......................   $  (435)  $(1,676)  $(1,068)  $(1,107)
  Unrecognized net actuarial (gain)
   losses.............................       (39)    2,485      (143)      (94)
  Adjustment required to recognize
   minimum liability..................       --       (890)      --        --
                                         -------   -------   -------   -------
    Net amount recognized.............   $  (474)  $   (81)  $(1,211)  $(1,201)
                                         =======   =======   =======   =======
Amounts recognized in the statement of
 financial position:
  Prepaid pension cost................   $   --    $ 1,001   $   --    $   --
  Accrued benefit liability...........      (474)   (1,548)   (1,211)   (1,201)
  Intangible asset....................       --        466       --        --
                                         -------   -------   -------   -------
    Net amount recognized.............   $  (474)  $   (81)  $(1,211)  $(1,201)
                                         =======   =======   =======   =======
</TABLE>

  In accordance with the provisions of SFAS No. 87, "Employers Accounting for
Pensions," at March 26, 1999 the Company recorded a minimum pension liability
representing the excess of the accumulated benefit obligation over the fair
value of the plan assets. The liability has been offset by intangible assets
to the extent possible. The balance of the liability of $890,000 was reported
in accumulated comprehensive income (loss), net of applicable deferred income
taxes of $363,000. No minimum pension liability exists at March 31, 2000.

  In determining the actuarial present value of projected benefit obligations
for the Company's Plan, at March 31, 2000 and March 26, 1999, a discount rate
of 5% was used. The Company Plan was "frozen" effective March 26, 1999 and
therefore, there were no future compensation increases for the Plan for the
periods subsequent to March 26, 1999. Effective June 30, 1999, the accrual of
future benefits under the Republic defined

                                      35
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

benefit plan was suspended. The defined benefit plans of the Company and
Republic were merged on December 31, 1999. In determining the actuarial
present value of projected benefit obligations for the merged plan at
March 31, 2000, a discount rate of 8% was issued. There are no future
compensation increases due to the suspension of benefit accruals. The expected
long-term annual rate of return on assets was 8% for the year ended March 31,
2000. The expected long-term annual rate of return on assets was 5% for the
year ended March 26, 1999.

  The actuarial present value of projected benefit obligations at March 26,
1999 for the Republic pension plan, used a discount rate of 7%. The assumed
future compensation increases for the Republic pension plan for the year ended
March 26, 1999 was 5% and the expected long-term annual rate of return on
assets was 9.5%.

  For the Health and Life Plans, the actuarial present value of benefit
obligations at March 31, 2000 and March 26, 1999, assumed a discount rate of
8% and 7%, respectively. The assumed healthcare cost trend rate for 2000 and
later was 8%. The assumed health care cost trend rate has a significant effect
on the amounts reported. A one-percentage-point change in the assumed health
care cost trend rate would have the following effects:

<TABLE>
<CAPTION>
                                                     1-Percentage 1-Percentage
                                                        Point        Point
                                                       Increase     Decrease
                                                     ------------ ------------
                                                          (in thousands)
   <S>                                               <C>          <C>
   Effect on the total of service cost and interest
    cost components in
    fiscal 2000.....................................     $ 8          $ (7)
   Effect on the postretirement benefit obligation
    as of March 31, 2000............................     $50          $(43)
</TABLE>

  The Company maintains a 401(k) plan, as amended, that covers substantially
all of its employees. Employees who have completed more than one year of
service are eligible and may contribute from 1% to 15% of their base pay. The
Company matches 50% of the first 6% of employee contributions. Employee
contributions vest immediately, while employer contributions vest based on
years of service. Employer contributions to the plan were $1,074,000,
$1,058,000 and $982,000 as of March 31, 2000, March 26, 1999 and March 27,
1998, respectively.

                                      36
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


10. STOCK COMPENSATION PLANS

  In 1996, the Board of Directors of the Company adopted a Stock Incentive
Plan (the "1996 Plan"). There were 1,100,000 shares of Common Stock reserved
for issuance under the 1996 Plan. The 1996 Plan provides for granting of stock
options that may be either "incentive stock options" within the meaning of
Section 422A of the Internal Revenue Code of 1986 (the "Code") or "non-
qualified stock options," which do not satisfy the provisions of Section 422A
of the Code. Options are required to be granted at an option price per share
equal to the fair market value of Common Stock on the date of grant. Stock
options may not be granted longer than 10 years from the date of the 1996
Plan. All options granted have ten-year terms and vest at the rate of 25% per
year, commencing one year from the date of grant. No options were exercised
during the year ended March 28, 1997.

<TABLE>
<CAPTION>
                                                                     Weighted
                                                                     Average
                   Stock Option Plan                     Shares   Exercise Price
                   -----------------                    --------  --------------
<S>                                                     <C>       <C>
Outstanding at March 28, 1997..........................  432,000      $11.90
  Granted..............................................  232,000       17.13
  Exercised............................................  (47,250)      10.72
  Expired..............................................  (28,500)      13.22
                                                        --------      ------
Outstanding at March 27, 1998..........................  588,250       13.99
  Granted..............................................  390,000       19.30
  Exercised............................................ (168,525)      14.76
  Expired..............................................  (10,250)       9.16
                                                        --------      ------
Outstanding at March 26, 1999..........................  799,475       16.36
  Granted..............................................  395,000       14.13
  Exercised............................................  (11,400)       9.00
  Expired/Cancelled....................................  327,575       19.55
                                                        --------      ------
Outstanding at March 31, 2000                            855,500      $15.75
                                                        ========      ======
</TABLE>

                                      37
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The following tabulation summarizes certain information concerning
outstanding and exercisable options at March 31, 2000, March 26, 1999 and
March 27, 1998:

<TABLE>
<CAPTION>
                                                        Price Range
                                             ----------------------------------
                                                      $12.00-
                                              $9.00    $20.00  $20.375  $24.13
                                             -------- -------- ------- --------
<S>                                          <C>      <C>      <C>     <C>
Outstanding options as of March 27, 1998:
  Number outstanding........................  187,750  333,500  67,000      --
  Weighted average exercise price........... $   9.00 $  15.23 $20.375 $    --
  Weighted average remaining contractual
   life in years............................      8.2      8.3     9.4      --
Exercisable options:
  Number exercisable........................   67,500   57,125     --       --
  Weighted average exercise price........... $   9.00 $  14.71 $20.375 $    --
Outstanding options as of March 26, 1999:
  Number outstanding........................  150,600  436,875  67,000  145,000
  Weighted average exercise price........... $   9.00 $  15.75 $20.375 $  24.13
  Weighted average remaining contractual
   life in years............................      7.2      7.6     8.4      9.1
Exercisable options:
  Number exercisable........................   75,300  125,744  16,750      --
  Weighted average exercise price........... $   9.00 $  15.61 $20.375 $    --
Outstanding options as of March 31, 2000:
  Number outstanding........................  121,700  690,300  43,500      --
  Weighted average exercise price........... $   9.00 $  15.06 $20.375 $    --
  Weighted average remaining contractual
   life in years............................      6.2      7.9     7.4      --
Exercisable options:
  Number exercisable........................   96,275  321,675  21,750      --
  Weighted average exercise price........... $   9.00 $  15.93 $20.375 $    --
</TABLE>

  If the Company had elected to recognize compensation cost based on the fair
value of the options granted at the grant date as prescribed by SFAS No. 123,
"Accounting for Stock-Based Compensation," net income and earnings per share
would have been reduced to the pro forma amounts shown below:

<TABLE>
<CAPTION>
                                                   March 31, March 26, March 27,
                                                     2000      1999      1998
                                                   --------- --------- ---------
                                                       (In thousands, except
                                                        per share amounts)
   <S>                                             <C>       <C>       <C>
   Pro forma:
     Net income...................................  $8,444    $17,009   $13,855
     Net income per share:
       Basic......................................  $  .53    $  1.01   $  1.00
       Diluted....................................  $  .53    $  1.01   $   .98
</TABLE>

                                      38
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The effects of applying SFAS No. 123 for purposes of determining pro forma
net income and net income per share are not likely to be representative of the
effects on reported net income for future years. The fair value of each option
grant was estimated on the date of grant using the Black-Scholes option
pricing model using the following weighted average assumptions:

<TABLE>
<CAPTION>
                                                   March 31, March 26, March 27,
                                                     2000      1999      1998
                                                   --------- --------- ---------
   <S>                                             <C>       <C>       <C>
   Risk free interest rate........................   5.24%     5.89%     5.58%
   Expected life in years.........................      4         4         4
   Expected volatility............................   49.6%     31.6%     25.5%
   Expected dividend yield........................   0.00%     0.00%     0.00%
</TABLE>

11. COMMITMENTS AND CONTINGENCIES

  The Company leases substantially all of its property and a portion of its
plant and equipment. Certain of the leases contained renewal options from two
to five years.

  Future minimum lease payments, under noncancelable operating leases with
initial terms of one year or more, are approximately as follows at March 31,
2000:

<TABLE>
<CAPTION>
                                                       Related           Total
                                                        Party          Operating
                                                       Leases   Other   Leases
                                                       ------- ------- ---------
                                                            (in thousands)
   <S>                                                 <C>     <C>     <C>
   2000............................................... $1,475  $10,764  $12,239
   2001...............................................  1,523    8,901   10,424
   2002...............................................  1,540    6,548    8,088
   2003...............................................  1,352    4,494    5,845
   2004...............................................    837    2,526    3,363
   Thereafter.........................................    366    7,225    7,591
                                                       ------  -------  -------
   Total minimum rental payments...................... $7,093  $40,458  $47,550
                                                       ======  =======  =======
</TABLE>

  Total rent expense amounted to $12,985,000, $10,695,000 and $7,054,000 for
fiscal 2000, 1999 and 1998, respectively, exclusive of the Company's
obligation for property taxes and insurance. Certain leases contain provisions
for rent escalation that is being amortized on a straight-line basis over the
lives of the leases.

  The Company is subject to legal proceedings and claims which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters will not have a material adverse effect on the financial position,
results of operations or cash flow of the Company.

12. NON-RECURRING EXPENSES

  During fiscal 1999, the Company expensed approximately $1.8 million of non-
recurring expenses. These expenses relate to an approximately $700,000 write-
off of an abandoned computer project, approximately $650,000 related to costs
incurred to consolidate duplicate warehouse facilities and approximately
$450,000 related to severance payments.

  During fiscal 1998, the Company expensed $442,000 of costs related to the
Inteuro and Car Body mergers, consisting primarily of legal, accounting and
regulatory fees. Additionally, the Company incurred approximately $705,000 of
costs related to severage payments to its former Chairman and Chief Executive
Officer.

                                      39
<PAGE>

                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


13. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

  The following is a summary of the quarterly results of operations for the
years ended March 31, 2000 and March 26, 1999.

<TABLE>
<CAPTION>
                                                 Quarter Ended (1)
                                      ---------------------------------------
                                       July 2  October 1 December 31 March 31
                                      -------- --------- ----------- --------
                                          (In thousands, except per share
                                                     amounts)
<S>                                   <C>      <C>       <C>         <C>
2000:
Net Sales............................ $101,381  $92,501    $86,197   $92,387
Gross Profit.........................   44,906   39,283     37,227    39,209
Non-recurring expenses...............      --       --         --      3,881(2)
Net Income...........................    5,495    3,191      1,337      (214)
Net Income Per Share--Basic..........     0.33     0.20       0.09     (0.01)
Net Income Per Share--Diluted........     0.33     0.20       0.09     (0.01)
</TABLE>

  Quarterly and year-to-date computations of per share amounts are made
independently. Therefore, the sum of per share amounts for the quarters may
not agree with per share amounts for the year shown elsewhere.

<TABLE>
<CAPTION>
                                                  Quarter Ended (1)
                                      -----------------------------------------
                                      June 26 September 25 December 25 March 26
                                      ------- ------------ ----------- --------
                                      (In thousands, except per share amounts)
<S>                                   <C>     <C>          <C>         <C>
1999:
Net Sales............................ $69,872   $81,438      $84,017   $96,720
Gross Profit.........................  30,338    35,034       36,958    43,567
Non-recurring expenses...............     --        402          103     1,309
Net Income...........................   3,860     4,082        4,952     4,871
Net Income Per Share--Basic..........    0.26      0.23         0.28      0.28
Net Income Per Share--Diluted........    0.26      0.23         0.28      0.28
</TABLE>
--------
(1) Fiscal 2000 contained 53 weeks and fiscal 1999 contained 52 weeks. The
    extra week in fiscal 2000 was in the quarter ended July 2, 2000.
(2) Consists of impairment expense related to goodwill, covenant not to
    compete and capitalized tooling (written off).

                                      40
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

  None.

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

  The following table sets forth information regarding the directors and
executive officers of the Company.

<TABLE>
<CAPTION>
                                                                       Years
                                                                      Employed
             Name              Age             Position              by Company
             ----              ---             --------              ----------
 <C>                           <C> <S>                               <C>
 Ronald G. Brown.............  63  Chairman of the Board                 32(1)
 Charles J. Hogarty..........  59  President, Chief Executive            39
                                    Officer and Director
 Kim D. Wood.................  44  Vice President and President          18(1)
                                    and Chief Operating Officer of
                                    North Star
 John M. Palumbo.............  44  Vice President, Treasurer, and         4
                                    Chief Financial Officer
 Christopher Northup.........  40  Vice President--Sales and             17
                                    Marketing
 James C. Lockwood...........  62  Vice President--General Counsel        3
                                    and Secretary
 Timothy C. McQuay(2)(3).....  48  Director                             --
 Al A. Ronco(2)..............  64  Director                             --
 George E. Seebart(2)(3).....  71  Director                             --
 Keith M. Thompson(3)          60  Director                             --
</TABLE>
--------
(1) Includes years of service at North Star.

(2) Member of the Audit Committee.

(3) Member of the Compensation Committee.

  RONALD G. BROWN was elected a director of the Company upon completion of the
North Star Plating Company ("North Star") merger pursuant to the terms of the
Merger Agreement and was elected as Chairman of the Board of Directors in May
1997. Mr. Brown served as President of North Star from its founding in 1968
until the North Star merger and he is currently the Vice-President--
Manufacturing of North Star. Mr. Brown has served as a member of the Board of
Directors and Vice President of the Bumper Recycling Association of North
America.

  CHARLES J. HOGARTY has served as the President, Chief Operating Officer and
a director of the Company since 1987 and was appointed the Chief Executive
Officer of the Company in May 1997. From his joining the Company in 1960 until
1987, Mr. Hogarty held various positions, including salesman, sales manager,
general manager and regional manager. Mr. Hogarty served as a director of the
Aftermarket Body Parts Association from 1984 to 1993, President in 1989 and
Chairman in 1990.

  KIM D. WOOD was elected President and Chief Operating Officer of North Star
upon completion of the North Star merger in March 1997 and was elected a Vice
President of the Company in May 1997. Mr. Wood served as Vice President of
North Star from 1982 until the completion of the North Star merger. Mr. Wood
is a director of the Certified Automotive Parts Association. From 1989 until
1999, a member of the Board of Directors of the Aftermarket Body Parts
Association, serving as its Chairman from 1993 through 1995.

  JOHN M. PALUMBO joined the Company as Vice President and Treasurer in March
1996 and was appointed Chief Financial Officer in May 1997. From 1988 until he
joined the Company in 1996, Mr. Palumbo served as Chief Financial Officer,
Treasurer and Corporate Secretary of American United Global, Inc., a public
company engaged in the manufacture of certain automotive parts.

  CHRISTOPHER NORTHUP has served as Vice President--Sales and Marketing since
October 1996. From 1987 until October 1996, Mr. Northup served as the National
Marketing Director. From his joining the Company in 1983 until 1987, Mr.
Northup held the position of Publications Manager.

                                      41
<PAGE>

  JAMES C. LOCKWOOD joined the Company in April 1997 and was appointed Vice
President--General Counsel and Secretary in May 1997. From July 1985 until he
joined the Company in April 1997, Mr. Lockwood was a member of the law firm of
Troy & Gould Professional Corporation.

  TIMOTHY C. MCQUAY was appointed a director of the Company upon the
completion of its initial public offering in June 1996. Mr. McQuay joined A.G.
Edwards & Sons, Inc. as a Senior member of its Investment Banking Department
in July 1997, where he is currently a Managing Director. From October 1994 to
July 1997, he was Managing Director--Corporate Finance of Crowell, Weedon &
Co. From May 1993 to October 1994, Mr. McQuay was Vice President, Corporate
Development with Kerr Group, Inc., a NYSE-listed plastics manufacturing
company. From May 1990 to May 1993, Mr. McQuay was Managing Director--Merchant
Banking with Union Bank. Mr. McQuay is a director of Meade Instruments Corp.,
a publicly-held company.

  AL A. RONCO served as the Executive Vice President of the Company from 1987
until he retired in August 1998. He also served as Secretary of the Company
from 1987 until he resigned that position in May 1997. From his joining the
Company in 1959 until 1987, Mr. Ronco held various positions, including
salesman, production manager, general manager and regional manager. Mr. Ronco
has been a director of the Company since 1987.

  GEORGE E. SEEBART was appointed a director of the Company upon the
completion of its initial public offering in June 1996. From 1964 until his
retirement in 1993, Mr. Seebart was employed in various executive positions
with Farmers Group, Inc., including as Senior Vice President, Field Operations
and Vice President, Sales and Marketing. Additionally, from 1987 to 1993, Mr.
Seebart was President of Mid-Century Insurance Company, a subsidiary of
Farmers Group, Inc.

  KEITH M. THOMPSON was the President and Chief Executive Officer of Republic
Automotive Parts, Inc. ("Republic") from 1986 until he resigned on November
30, 1998. Republic was acquired by the Company in June 1998. Mr. Thompson was
elected a director of the Company in March 1999.

  Pursuant to the North Star merger, certain shareholders of the Company,
including Charles J. Hogarty, Al A. Ronco and John M. Palumbo, agreed to vote
all shares held by them to maintain Ronald G. Brown as a director of the
Company.

  All directors are elected annually and serve until the next annual meeting
of shareholders or until their successors have been elected and qualified. All
officers are appointed by and serve at the discretion of the Board of
Directors, subject to employment agreements, where applicable. There are no
family relationships between any directors or officers of the Company.

  The Board of Directors has established an Audit Committee, whose members are
currently Messrs. McQuay, Ronco and Seebart and a Compensation Committee whose
members are Messrs. McQuay, Seebart and Thompson.

ITEM 11. EXECUTIVE COMPENSATION

  The information required by this Item will be contained in the Company's
definitive Proxy Statement for its 2000 Annual Meeting of Stockholders under
the captions "Election of Directors" and "Executive Compensation," and is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  The information required by this Item will be contained in the Company's
definitive Proxy Statement for its 2000 Annual Meeting of Stockholders under
the caption "Security Ownership," and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  The information required by this Item will be contained in the Company's
definitive Proxy Statement for its 2000 Annual Meeting of Stockholders under
the caption "Certain Transactions," and is incorporated herein by reference.

                                      42
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

  (a)(1) Financial Statements:

  See the Index to Item 8 above.

  (a)(2) Financial Statement Schedule:

  See (d) below.

  (a)(3) Exhibits:

  The following exhibits are filed herewith or incorporated by reference
herein:

<TABLE>
<CAPTION>
 Exhibit No.                             Description
 -----------                             -----------
 <C>          <S>
   3.1(2)     Amended and Restated Bylaws of the Registrant. [3.4]*

 3.1.1(4)     Amendment to Amended and Restated Bylaws of the Registrant.
              [3.1.1]*

 3.1.2(10)    Amendment to Amended and Restated Bylaws of the Registrant.
              [3.1.2]*

   3.2(2)     Restated Articles of Incorporation of the Registrant. [3.5]*

 3.2.1(8)     Amendment to Restated Articles of Incorporation of Registrant.
              [3.2.1]*

 3.2.2(10)    Amendment to Restated Articles of Incorporation of Registrant.
              [3.2.2]*

 3.2.3(12)    Certificate of Determination of Series A Junior Participating
              Preferred Stock. [4.2(A)]*

   4.1(2)     Form of stock certificate. [4.1]*

   4.2(12)    Rights Agreement dated as of February 10, 2000 [4.2]*

   4.3        Warrant to Purchase 100,000 shares of Common Stock dated February
              21, 2000.

  10.1(1)(A)  Employment Agreement dated June 20, 1996, between the Registrant
               and Charles J. Hogarty.[10.2]*

  10.2(3)(A)  Employment Agreement between North Star and Ronald G. Brown.
              [10.5]*

  10.3(3)(A)  Employment Agreement between North Star and Kim D. Wood. [10.6]*

  10.4(A)     Employment Agreement between the Registrant and John M. Palumbo
              dated December 1, 1999.

  10.5(1)(A)  Indemnification Agreement dated June 20, 1996 between the
               Registrant and Charles J. Hogarty. [10.6]*

  10.6(1)(A)  Indemnification Agreement dated June 20, 1996, between the
               Registrant and John M. Palumbo. [10.9]*

  10.7(3)(A)  Indemnification Agreement between the Registrant and Ronald G.
              Brown. [10.12]*

  10.8(3)(A)  Indemnification Agreement between the Registrant and Kim D. Wood.
              [10.13]*

  10.9(1)(A)  Keystone Automotive Industries, Inc. 1996 Stock Incentive Plan,
               together with forms of incentive stock option, non-qualified
               stock option and restricted stock agreements. [10.10]*

  10.10(7)(A) Amendment to Registrant's 1996 Stock Incentive Plan

  10.11(1)    The Registrant's Employee Defined Benefit Pension Plan, as
              amended. [10.11]*

  10.12(1)    Lease Agreement, dated January 5, 1995, between V-JAC Properties,
               Ltd. and the Registrant. [10.14]*

  10.13(1)    Lease Agreement, dated January 5, 1995, between V-JAC Properties,
               Ltd. and the Registrant. [10.18]*
</TABLE>

                                       43
<PAGE>

<TABLE>

<CAPTION>
  Exhibit
    No.                                 Description
  -------                               -----------
 <C>       <S>
 10.14(3)  Voting Agreement dated December 6, 1996, among the Registrant, North
            Star Plating Company, Virgil K. Benton, II, Charles J. Hogarty, Al
            A. Ronco, Robert L. Blanton and John M. Palumbo. [10.37]*

 10.15(3)  Credit Agreement dated March 25, 1997 between the Registrant and
            Mellon Bank, N.A. [10.38]*

 10.16(7)  Amendment No. 1 to Credit Agreement between the Registrant and
           Mellon Bank, N.A.

 10.17(7)  Amendment No. 2 to Credit Agreement between the Registrant and
           Mellon Bank, N.A.

 10.18(10) Amendment No. 3 to Credit Agreement between the Registrant and
           Mellon Bank, N.A. [10.25]*

 10.19(10) Amendment No. 4 to Credit Agreement between the Registrant and
           Mellon Bank, N.A. [10.26]*

 10.20(11) Amendment No. 5 to Credit Agreement between the Registrant and
           Mellon Bank, N.A. [a]*

 10.21(4)  Lease Agreement, dated January 1, 1995, between North Star and the
            spouses of Ronald G. Brown and Kim D. Wood. [10.41]*

 10.22(4)  Lease Agreement, dated January 1, 1995, between North Star and the
            spouse of Ronald G. Brown and a third party. [10.42]*

 10.23(4)  Lease Agreement, dated January 1, 1995, between North Star and a
            partnership owned by Kim D. Wood and an employee of North Star.
            [10.43]*

 10.24(4)  Lease Agreement, dated May 20, 1996, between North Star and a
            partnership owned by the spouses of Ronald G. Brown and Kim Wood
            and the Brown Family Limited Partnership. [10.44]*

 10.25(9)  Stock Acquisition Agreement dated August 3, 1998 by and among the
            Registrant, Republic Automotive Parts, Inc., Republic Automotive
            Parts Distribution, Inc. and General Parts, Inc. [2.1]*

 10.26(A)  Key Employee Salary Continuation Agreement between Registrant and
            James C. Lockwood dated April 11, 2000.

 21.1      Subsidiaries.

 23.1      Consent of Ernst & Young LLP, Independent Auditors.

 27.1      Financial Data Schedule.
</TABLE>
--------
 * Indicates the exhibit number of the document in the original filing.

(1) Filed as an exhibit to the Registration Statement on Form S-1 filed with
    the Securities and Exchange Commission on April 18, 1996 (File No. 333-
    3994).

(2) Filed as an exhibit to Amendment No. 2 to the Registration Statement on
    Form S-1 filed with the Securities and Exchange Commission on June 17,
    1996.

(3) Filed as an exhibit to the Registration Statement on Form S-4 filed with
    the Securities and Exchange Commission on December 23, 1996 (File No. 333-
    18663).

(4) Filed as an exhibit to the Registration Statement on Form S-1 filed with
    the Securities and Exchange Commission on June 6, 1997 (File No. 333-
    28709).

(7) Filed as an exhibit to Registrant's Registration Statement on Form S-4
    filed with the Securities and Exchange Commission on May 18, 1998 (File
    No. 333-52969)

(8) Filed as an exhibit to Registrant's Form 10-K filed with the Securities
    and Exchange Commission on June 24, 1998.

(9) Filed as an exhibit to Registrant's Form 8-K filed with the Securities and
    Exchange Commission on September 14, 1998.


                                      44
<PAGE>

(10) Filed as an exhibit to Registrant's Form 10-K filed with the Securities
     and Exchange Commission on June 24, 1999.

(11) Filed as an exhibit to Registrant's Form 10-Q filed with the Securities
     and Exchange Commission on February 14, 2000.

(12) Filed as an exhibit to Registrant's Form 8-K filed with the Securities
     and Exchange Commission on February 23, 2000.

(A) A management contract or compensatory plan or arrangement as defined in
    Item 601 of Regulation S-K.

  (b) Reports on Form 8-K:

  On February 23, 2000, the Company filed a Current Report on Form 8-K with
the Securities and Exchange Commission with respect to Item 5, Other Events.

  (c) Exhibits:

  See (a)(3) above.

  (d) Financial Statement Schedules:

  Schedule II--Valuation and Qualifying Accounts

  All other schedules are omitted because they are not applicable or the
required information is shown in the Registrant's financial statements or the
related notes thereto.

                                      45
<PAGE>

                         KEYSTONE AUTOMOTIVE INDUSTRIES

                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)

<TABLE>
<CAPTION>
                                         Additions
                                   ---------------------
                        Balance at Charged to Charged to
                        Beginning  Costs and    Other               Balance at
      Description        of Year    Expenses   Accounts  Deductions End of Year
      -----------       ---------- ---------- ---------- ---------- -----------
<S>                     <C>        <C>        <C>        <C>        <C>
Year ended March 27,
 1998
  Allowance for
   uncollectible
   accounts............    $732       $372      $ --        $511      $  593
Year ended March 26,
 1999
  Allowance for
   uncollectible
   accounts............    $593       $601      $ 249       $481      $  962
Year ended March 31,
 2000
  Allowance for
   uncollectible
   accounts............    $962       $923      $ --        $738      $1,145
</TABLE>
--------
(1) Uncollectible accounts written off, net of recoveries.

<TABLE>
<CAPTION>
                                          Additions
                                    ---------------------
                         Balance at Charged to Charged to
                         Beginning  Costs and    Other               Balance at
      Description         of Year    Expenses   Accounts  Deductions End of Year
      -----------        ---------- ---------- ---------- ---------- -----------
<S>                      <C>        <C>        <C>        <C>        <C>
Year ended March 27,
 1998
  Allowance for slow-
   moving inventory.....   $  510      $495      $ 629       $444      $1,190
Year ended March 26,
 1999
  Allowance for slow-
   moving inventory.....   $1,190      $251      $ 156       $ 75      $1,522
Year ended March 31,
 2000
  Allowance for slow-
   moving inventory.....   $1,522      $408      $ --        $290      $1,640
</TABLE>


                                       46
<PAGE>

                                  SIGNATURES

  Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                          KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

                                                  /s/ Charles J. Hogarty
                                          By: _________________________________
                                                    Charles J. Hogarty,
                                                         President

Dated: June 23, 2000

  Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this Annual Report has been signed by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
             Signature                              Title                     Date
             ---------                              -----                     ----

<S>                                  <C>                                  <C>
      /s/ Charles J. Hogarty         President, Chief Executive Officer   June 23, 2000
____________________________________  and Director
         Charles J. Hogarty

       /s/ John M. Palumbo           Vice President and Treasurer         June 23, 2000
____________________________________  (Principal Financial and Accounting
          John M. Palumbo             Officer)

       /s/ Ronald G. Brown           Director                             June 23, 2000
____________________________________
          Ronald G. Brown

      /s/ Timothy C. McQuay          Director                             June 23, 2000
____________________________________
         Timothy C. McQuay

                                     Director                             June   , 2000
____________________________________
            Al A. Ronco

      /s/ George E. Seebart          Director                             June 23, 2000
____________________________________
         George E. Seebart

                                     Director                             June   , 2000
____________________________________
         Keith M. Thompson
</TABLE>

                                      47
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit No.                       Description                         Page No.
 -----------                       -----------                         --------
 <C>         <S>                                                       <C>
   4.3       Warrant to Purchase 100,000 shares of Common Stock
             dated February 21, 2000.
  10.4       Employment Agreement between the Registrant and John M.
             Palumbo dated December 1, 1999.
 10.26       Key Salary Continuation Agreement between Registrant
             and James C. Lockwood dated April 11, 2000.
  21.1       Subsidiaries.
  23.1       Consent of Ernst & Young LLP, independent auditors.
  27.1       Financial Data Schedule.
</TABLE>