<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                  FORM 10-Q/A


(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

              For the quarterly period ended: September 25, 1998


                                      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


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


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


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


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


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

The number of shares outstanding of the registrant's Common Stock, no par value,
at September 25, 1998 was 17,587,000 shares.

This Form 10-Q/A contains 8 pages.
<PAGE>
 
                     KEYSTONE AUTOMOTIVE INDUSTRIES, INC.

                                     INDEX
                                     -----

PART I.         FINANCIAL INFORMATION                               Page Number
                                                                            
Item 1.   Condensed Consolidated Financial Statements        
     
          Condensed Consolidated Balance Sheets                           3
 
             September 25, 1998 (unaudited) and March 27, 1998


          Condensed Consolidated Statements of Income (unaudited)         4 

             Three months and six months ended September 25, 1998 and
             Three months and six months ended September 26, 1997

          Condensed Consolidated Statements of Cash Flows (unaudited)     5

             Six months ended September 25, 1998 and September 26, 1997

          Notes to Condensed Consolidated Financial Statements 
          (unaudited)                                                     6

Signatures                                                                8


<PAGE>
 
PART I - FINANCIAL INFORMATION

     This Form 10Q/A amends and corrects the Condensed Consolidated Statement 
of Cash Flows for the six month period ended September 25, 1998, note 3 to the 
Notes and corrects other typographical errors in Item 1, as presented in the 
original Form 10-Q filing dated November 9, 1998.

Item 1.    Consolidated Financial Statements
           ---------------------------------


                     Keystone Automotive Industries, Inc.
                     Condensed Consolidated Balance Sheets
                     (In thousands, except share amounts)

<TABLE> 
<CAPTION> 
                                                        September 25,  March 27,
                                                           1998          1998
                                                        (Unaudited)     (Note)
                                                        -------------  ---------
                    ASSETS
<S>                                                     <C>            <C>  
Current Assets:
  Cash and cash equivalents                                 $  44,544  $  10,859
  Accounts receivable, net of allowance of $1,417
   at September 1998 and $593 at March 1998                    25,976     23,476
  Inventories, primarily finished goods                        63,676     54,870
  Other current assets                                         12,632      4,788
                                                            ---------  ---------
    Total current assets                                      146,828     93,993

Plant, property and equipment, net                             17,228     14,873
Goodwill, net of accumulated amortization of $699 
 at September 1998 and $437 at March 1998                      22,155      6,295
Intangibles, net of accumulated amortization of 
 $1,738 at September 1998 and $1,302 at March 1998              3,397      1,980
Other assets                                                    9,287      2,555
                                                            ---------  ---------
  Total assets                                              $ 198,895  $ 119,696
                                                            =========  =========

           LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
  Bankers acceptance                                        $   1,929  $   1,852
  Accounts payable                                             14,225     13,428
  Accrued liabilities                                           8,958      5,480
  Current portion of long-term debt                             1,384        779
                                                            ---------  ---------
    Total current liabilities                                  26,496     21,539

Long-term debt, less current portion                              422        503
Deferred taxes                                                  1,934        426
Other long-term liabilities                                     1,390         --

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--17,587,000 at 
     September 1998 and 14,642,000 at March 1998              120,680     57,196
  Additional paid-in capital                                      724        724
  Retained Earnings                                            47,249     39,308
                                                            ---------  ---------
    Total shareholders' equity                                168,653     97,228
                                                            ---------  ---------
    Total liabilities and shareholders' equity              $ 198,895  $ 119,696
                                                            =========  =========
</TABLE> 

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

NOTE:  The balance sheet at March 27, 1998 has been derived from the audited
       consolidated financial statements at that date but does not include all
       of the information and footnotes required by generally accepted
       accounting principles for complete financial statements.

                                       3
<PAGE>
 
                     Keystone Automotive Industries, Inc.
                  Condensed Consolidated Statements of Income
              (In thousands, except share and per share amounts)
                                  (Unaudited)

<TABLE> 
<CAPTION> 
                                                       Three Months Ended               Six Months Ended
                                                 -----------------------------   -----------------------------
                                                 September 25,   September 26,   September 25,   September 26,
                                                          1998            1997            1998            1997
                                                 -------------   -------------   -------------   -------------
<S>                                              <C>             <C>             <C>             <C> 
Net sales                                          $   81,438      $   63,396      $  151,310      $  126,141
Cost of sales                                          46,404          35,973          85,938          72,214
                                                   ----------      ----------      ----------      ----------
Gross profit                                           35,034          27,423          65,372          53,927
Operating expenses:
  Selling and distribution expenses                    22,264          17,864          41,812          34,504
  General and administrative                            6,341           4,204          11,127           8,684
  Service Center consolidation costs                      402              --             402              --
  Severance costs                                          --              --              --             705
                                                   ----------      ----------      ----------      ----------
Operating income                                        6,027           5,355          12,031          10,034
Other income                                              742             348           1,182             436
Interest expense                                          (12)            (96)            (23)           (403)
                                                   ----------      ----------      ----------      ----------
Income before income taxes                              6,757           5,607          13,190          10,067
Income tax provision                                    2,675           1,683           5,248           2,890
                                                   ----------      ----------      ----------      ----------
Net income                                         $    4,082      $    3,924      $    7,942      $    7,177
                                                   ==========      ==========      ==========      ==========
Earnings Per Share
  Basic                                            $     0.23      $     0.27      $     0.49      $     0.54
                                                   ==========      ==========      ==========      ==========
  Diluted                                          $     0.23      $     0.27      $     0.49      $     0.54
                                                   ==========      ==========      ==========      ==========
Weighted average shares outstanding
  Basic                                            17,587,000      14,624,000      16,113,000      13,259,000
                                                   ==========      ==========      ==========      ==========
  Diluted                                          17,797,000      14,800,000      16,363,000      13,390,000
                                                   ==========      ==========      ==========      ==========
   (unaudited pro forma information) (Note 4)

  Net income, as previously reported               $    4,082      $    3,924      $    7,942      $    7,177
  Pro forma tax adjustment                         $       --      $     (518)     $       --      $   (1,050)
                                                   ----------      ----------      ----------      ----------
  Pro forma net income                             $    4,082      $    3,406      $    7,942      $    6,127
                                                   ==========      ==========      ==========      ==========
  Pro forma net income per share - basic           $     0.23      $     0.23      $     0.49      $     0.46
                                                   ==========      ==========      ==========      ==========
  Pro forma net income per share - diluted         $     0.23      $     0.23      $     0.49      $     0.46
                                                   ==========      ==========      ==========      ==========
</TABLE> 

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

                                       4
<PAGE>
 
                     Keystone Automotive Industries, Inc.
                Condensed Consolidated Statements of Cash Flows
                                (In thousands)
                                  (Unaudited)


<TABLE> 
<CAPTION> 
                                                          Six months Ended
                                                    ----------------------------
                                                    September 25,  September 26,
                                                             1998           1997
                                                    -------------  -------------
<S>                                                 <C>            <C> 
OPERATING ACTIVITIES                                              
Net income                                             $  7,942       $  7,177
Adjustments to reconcile net income to net cash                   
  provided by operating activities:                               
Depreciation and amortization                             2,217          1,666
Deferred taxes                                             (230)            --
Provision for losses on uncollectible accounts              233             55
Provision for losses on inventory                            --            184
Changes in operating assets and liabilities:                      
  Accounts receivable                                     1,028           (129)
  Inventories                                             2,217             33 
  Prepaid expenses, other receivables and other                   
    assets                                               (9,579)          (509)
  Accounts payable, and other accrued liabilities        (2,552)        (8,047)
                                                       --------       --------
Net cash provided by operating activities                 1,276            430
                                                                  
INVESTING ACTIVITIES                                              
Proceeds from sale of assets                             50,001             10
Purchases of property, plant and equipment               (1,327)        (1,758)
Cash paid for acquisitions                               (2,650)        (5,647)
                                                       --------       --------
Net cash provided by (used in) investing                 46,024         (7,395)
activities
                                                                  
FINANCING ACTIVITIES                                              
Borrowings under bank credit facility                        --            187
Payments under bank credit facility                     (19,477)       (13,037)
Bankers acceptances and other short-term debt, net           77           (245)
S corp distributions                                         --           (934)
Principal payments on long-term debt                                      (205)
Net proceeds on option exercise                             421            507
Net proceeds on secondary offering                           --         37,836
                                                       --------       --------
Net cash (used in) provided by financing activities     (18,979)        24,109
                                                       --------       --------
Net increase in cash and cash equivalents                28,321         17,144
                                                                  
Cash and cash equivalents at beginning of period       $ 10,858       $  1,804
Cash from Republic stock acquisition                   $  5,365             --
                                                       --------       --------
Cash and cash equivalents at end of period             $ 44,544       $  1,804
                                                       ========       ========
Supplemental disclosures                                          
  Interest paid during the period                      $    184       $    424
  Income taxes paid during the period                  $  3,208       $  2,176
                                                       ========       ========
</TABLE> 

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

                                       5
<PAGE>
 
                     Keystone Automotive Industries, Inc.

             Notes to Condensed Consolidated Financial Statements
             ----------------------------------------------------
                                  (Unaudited)
                              September 25, 1998

1.   Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions of Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
only of normal recurring accruals, considered necessary for fair presentation,
with respect to the interim financial statements have been included. The results
of operations for the three month and six month periods ended September 25, 1998
are not necessarily indicative of the results that may be expected for the full
year ending April 2, 1999. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended March 27, 1998,
included in the Company's Form 10-K filed with the Securities and Exchange
Commission on June 25, 1998.

2.   New Accounting Standards

     In June 1998, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards (SFAS) No. 133. "Accounting for Derivative 
Instruments and Hedging Activities," which is required to be adopted in years 
beginning after June 15, 1998. Because of the Company's minimal use of 
derivatives, management does not anticipate that the adoption of the new 
Statement will have a significant effect on earnings or the financial position 
of the Company.

3.   Severance/Service Center Consolidation Costs

     In May 1997, the Company incurred approximately $705,000 of costs related 
to the severance of its former Chairman and Chief Executive Officer.

     During the September 1998 quarter, the Company consolidated service centers
in strategic locations where more than one operation existed. The cost of the 
consolidation was approximately $402,000.

4.   Unaudited Pro Forma Information

     Pro forma net income and pro forma net income per share information for the
three month and six month periods ended September 26, 1997 gives effect to an 
income tax adjustment to reflect taxation of the income of two corporations 
acquired by the Company in January 1998 (accounted for as poolings of interest) 
as "C" corporations, rather than "S" corporations, at an estimated rate of 
approximately 39%.

5.   Acquisitions

     On June 27, 1998, the Company completed its acquisition of Republic
Automotive Parts, Inc. ("Republic"). The Company issued approximately 2,907,456
shares of its common stock in exchange for the outstanding common stock of
Republic for a total purchase price of approximately $63.1 million using an
average share price of $21.69. The fair value of the assets acquired
approximated $48,000,000, net of approximately $29,000,000 of liabilities
assumed. The excess of the purchase price over assets acquired (Goodwill)
approximated $15,000,000 and is being amortized over 30 years. The acquisition
of Republic is being accounted for under the purchase method of accounting.

     The net assets related to the mechanical hard parts operations were
recorded as assets held for sale in the allocation of the opening balance sheet
at June 27, 1998, which included adjustments to reflect the mechanical hard
parts results of operations from the opening balance dates to the date of sale,
as well as the difference between net value of the assets disposal of the
purchase price. The operating results of the Company from June 27, 1998,
excluded any effects from the mechanical hard parts business.

                                       6
<PAGE>
 
        At September 25, 1998, other long-term assets includes $3,698,000,
consisting of assets at the one Republic mechanical hard parts operating
location yet to be sold, net of various reserves. The amounts reflected on the
balance sheet represents the Company's estimate of the assets held for fair
value.

Pro Forma results of the operations for the six months ended September 25,1998
and September 27, 1997, as through Republic had been combined with the Company
at the beginning of each period is as follows:


                                                September 25,     September 26,
                                                         1998              1997
                                              ---------------- ----------------
Net sales                                     $      166,609   $       153,795

Net income                                    $        7,502   $         8,081

Weighted average shares - diluted             $   16,363,000   $    16,297,000

Net income per share                          $         0.47   $          0.50


                                       7
<PAGE>
                                  SIGNATURES

 
     Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.





                                    KEYSTONE AUTOMOTIVE INDUSTRIES, INC.


                                By: /s/ John M. Palumbo
                                    -----------------------------------
                                    John M. Palumbo
                                    Chief Financial Officer
                                    (Duly Authorized Officer and Principal
                                     Financial and Accounting Officer)


Date: November 20, 1998


                                       8