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LKQ Corporation Announces Results for First Quarter 2015

 

  • Revenue growth of 9.1% to a record $1.77 billion
  • Organic revenue growth for parts and services of 7.5%
  • First quarter 2015 diluted EPS of $0.35; adjusted EPS of $0.36
  • Affirms full year 2015 guidance

 

Chicago, IL (April 30, 2015) - LKQ Corporation (Nasdaq:LKQ) today reported record revenue for the first quarter of 2015 of $1.77 billion, an increase of 9.1% as compared to $1.63 billion in the first quarter of 2014. Net income for the first quarter of 2015 was $107.1 million, an increase of 2.3% as compared to $104.7 million for the same period of 2014. Diluted earnings per share of $0.35 for the first quarter ended March 31, 2015 increased 2.9% from $0.34 for the first quarter of 2014. The Company noted that adjusted diluted earnings per share for the first quarter 2015 would have been $0.36 compared to $0.35 for the first quarter of 2014 after adjusting each of the periods for net losses resulting from restructuring and acquisition related expenses, loss on debt extinguishment in 2014 and the change in fair value of contingent consideration liabilities.

"We are pleased with our operating results during the quarter even with the headwinds of scrap prices and currency devaluations," stated Robert Wagman, President and Chief Executive Officer of LKQ Corporation. “I am proud that we overcame these challenges and posted 9.1% revenue growth and segment EBITDA margins roughly on par with the first quarter of 2014. I was encouraged by signs of improvement in our Wholesale Europe segment profitability after a difficult fourth quarter. Organic revenue growth for parts and services was 7.5%, including 14% in our Wholesale Europe segment.”

Balance Sheet and Liquidity

Cash flow from operations totaled $180 million during the first quarter, which after investing approximately $34 million in capital expenditures and other long term assets, allowed the Company to increase cash balances and reduce its outstanding debt. As of March 31, 2015, LKQ’s balance sheet reflected cash and equivalents of $175 million and outstanding debt of $1.73 billion. Total availability under the Company’s credit facility at March 31, 2015 was approximately $1.2 billion.

Other Events

During the first quarter of 2015, LKQ acquired a salvage business located in Nebraska and a distributor of aftermarket automotive products in the Netherlands. LKQ’s European operations opened three Euro Car Parts branches in the first quarter of 2015.

In April 2015, we renewed our design patent license agreement with Ford Global Technologies, LLC. The license agreement grants to LKQ the exclusive right to distribute aftermarket replicas of Ford automotive parts covered by U.S. design patents. The renewal is on substantially the same terms as the previous agreement except that the term now extends until March 2020.

Company Outlook

 

2015 Guidance

Organic revenue growth for parts & services

6.5% to 9.0%

Net income

$420 million to $450 million

Diluted EPS

$1.36 to $1.46

Cash flow from operations

Approximately $425 million

Capital expenditures

$150 million to $180 million

 

The Company is reaffirming its February 2015 guidance. Mr. Wagman commented, “We are optimistic about our prospects for 2015 after a solid start to the year despite interim challenges such as those witnessed in the quarter with scrap and currency fluctuations. Our guidance reflects this belief with strong year over year growth in revenue, earnings and cash flows projected for 2015.”

Guidance for 2015 is based on current conditions (including 2015 acquisitions completed to date) and excludes the impact of restructuring and acquisition related expenses; gains or losses related to acquisitions or divestitures (including changes in the fair value of contingent consideration liabilities); and capital spending related to future business acquisitions.

Quarterly Conference Call

LKQ will host a conference call and webcast on April 30, 2015 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) with members of senior management to discuss the Company's results.

To access the investor conference call, please dial (877) 407-0668. International access to the call may be obtained by dialing (201) 689-8558. The audio webcast can be accessed via the Company's website at www.lkqcorp.com in the Investor Relations section.

A replay of the conference call will be available by telephone at (877) 660-6853 or (201) 612-7415 for international calls. The telephone replay will require you to enter conference ID: 13606785#. An online replay of the audio webcast will be available on the Company's website. Both formats of replay will be available through May 29, 2015. Please allow approximately two hours after the live presentation before attempting to access the replay.

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles.  LKQ has operations in North America, the United Kingdom, the Netherlands, Belgium, France, Scandinavia, Australia and Taiwan. LKQ offers its customers a broad range of replacement systems, components, equipment and parts to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

Forward Looking Statements

The statements in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding our outlook or guidance, expectations, beliefs, hopes, intentions or strategies. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us. Actual events or results may differ materially from those expressed or implied in the forward looking statements as a result of various factors.

 

These factors include:

 

  • Changes in economic and political activity in the U.S. and other countries in which we are located or do business, and the impact of these changes on the demand for our products and our ability to obtain financing for operations;
  • fluctuations in the pricing of new original equipment manufacturer (“OEM”) replacement products;
  • the availability and cost of our inventory;
  • variations in the number of vehicles sold, vehicle accident rates, miles driven, and the age profile of vehicles in accidents;
  • changes in state or federal laws or regulations affecting our business;
  • inaccuracies in the data relating to our industry published by independent sources upon which we rely;
  • changes in the level of acceptance and promotion of alternative automotive parts by insurance companies and auto repairers;
  • changes in the demand for our products and the supply of our inventory due to severity of weather and seasonality of weather patterns;
  • increasing competition in the automotive parts industry;
  • our ability to satisfy our debt obligations and to operate within the limitations imposed by financing agreements;
  • our ability to obtain financing on acceptable terms to finance our growth;
  • declines in the values of our assets;
  • fluctuations in the prices of fuel, scrap metal and other commodities;
  • our ability to develop and implement the operational and financial systems needed to manage our operations;
  • our ability to identify sufficient acquisition candidates at reasonable prices to maintain our growth objectives;
  • our ability to integrate, realize expected synergies, and successfully operate acquired companies and any companies acquired in the future, and the risks associated with these companies;
  • restrictions or prohibitions on selling certain aftermarket products to the extent OEMs seek and obtain more design patents than they have in the past and are successful in asserting infringement of these patents and defending their validity;
  • changes to our business relationships with insurance companies or changes by insurance companies to their business practices relating to the use of our products;
  • product liability claims by the end users of our products or claims by other parties who we have promised to indemnify for product liability matters;
  • costs associated with recalls of the products we sell;
  • currency fluctuations in the U.S. dollar, pound sterling and euro versus other currencies;
  • instability in regions in which we operate that can affect our supply of certain products;
  • interruptions, outages or breaches of our operational systems, security systems, or infrastructure as a result of attacks on, or malfunctions of, our systems;
  • additional unionization efforts, new collective bargaining agreements, and work stoppages;
  • higher costs and  the resulting potential inability to service our customers to the extent that our suppliers decide to discontinue business relationships with us; and
  • other risks that are described in our Form 10-K filed March 2, 2015 and in other reports filed by us from time to time with the Securities and Exchange Commission.

 

You should not place undue reliance on these forward-looking statements. All of these forward-looking statements are based on our expectations as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

Contact:

 

Joseph P. Boutross-Director, Investor Relations

LKQ Corporation 

(312) 621-2793

jpboutross@lkqcorp.com