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LKQ Corporation Achieves Record Results for 2011
- Revenue growth of 32% to $3.3 billion
- Fourth quarter 2011 diluted EPS increases 36%
- 2011 diluted EPS increases 23%
- Provides 2012 guidance
Chicago, IL (February 23, 2012) - LKQ Corporation (Nasdaq:LKQX) today announced results for its fourth quarter and full year ended December 31, 2011. Income from continuing operations for the fourth quarter was $56.1 million and diluted earnings per share was $0.38, a 36% increase over the $0.28 reported for 2010. For the full year 2011, income from continuing operations was $210.3 million and diluted earnings per share was $1.42, a 23% increase over the $1.15 reported for 2010.
"We completed a successful 2011 with a solid fourth quarter," stated Robert Wagman, President and Chief Executive Officer of LKQ Corporation. "In 2011, the Company surpassed $3 billion in revenue for the first time, and achieved double digit total organic revenue growth and diluted EPS growth despite the headwinds of high fuel costs, the high cost of salvage vehicles and the reduction in miles driven that we faced throughout the year.”
Mr. Wagman added, “We made 21 acquisitions in 2011 including the purchase of Euro Car Parts. The financial performance of these businesses and their integration into our existing operations is progressing as expected.”
Fourth Quarter 2011 Reported Results
For the fourth quarter of 2011, revenue was $939.6 million compared with $674.1 million for the fourth quarter of 2010, an increase of 39.4%. Income from continuing operations for the fourth quarter was $56.1 million compared with $41.3 million in the prior year, an increase of 35.9%. For the fourth quarter, organic revenue growth was 6.4%, and parts and services revenue grew organically by 5.6%. Acquisition revenue growth for the fourth quarter was 33.1%.
Full Year 2011 Reported Results
For the full year of 2011, revenue was $3.27 billion compared with $2.47 billion in 2010, an increase of 32.4%. Income from continuing operations for the full year was $210.3 million compared with $167.1 million for the prior year, an increase of 25.8%. For the full year of 2011, organic revenue growth was 10.7%, and parts and services revenue grew organically by 7.9%. Acquisition revenue growth for 2011 was 21.5%.
Balance Sheet and Liquidity
As of December 31, 2011, LKQ’s balance sheet reflected cash and equivalents of $48.2 million, and the outstanding obligations under the Company’s credit facilities were $901.4 million ($240.6 million of term loans and $660.7 million of revolver borrowings). Total availability under the credit agreement at December 31, 2011 was $453.9 million, composed of $253.9 million on its revolving credit facility and $200.0 million of delayed draw term loan under its credit facility. On January 31, 2012, the Company borrowed the full $200 million available term loan and used those proceeds to repay a portion of its revolver debt.
During the fourth quarter, LKQ acquired four businesses including the previously announced Euro Car Parts acquisition, the largest automotive aftermarket parts distributor in the United Kingdom. In North America, the Company acquired a heavy duty truck business in Colorado, a wholesale salvage business in Idaho, and a classic vehicle restoration parts and accessories distribution business in Georgia.
On November 7, 2011, the Board of Directors elected Joseph M. Holsten as the Chairman of the Board of Directors and elected Robert L. Wagman as a member of the Board of Directors.
In January 2012, Mr. Wagman was appointed LKQ’s President and Chief Executive Officer, succeeding Mr. Holsten who retired as an employee effective January 1, 2012. Mr. Holsten will continue as a consultant to the Company and Chairman of the Board of Directors.
Based on current conditions and excluding restructuring expenses and any gains or losses related to acquisitions or divestitures (including changes in the fair value of contingent consideration liabilities), LKQ anticipates full year 2012 organic revenue growth from parts and services will be in the range of 5.5% to 7.5%, income from continuing operations will be in the range of $258 million to $278 million and diluted earnings per share from continuing operations will be in the range of $1.72 to $1.85.
Cash flow from operations for 2012 is projected to be in the range of $250 million to $280 million. The Company estimates capital expenditures related to property and equipment (excluding any acquisition related expenditures) will be between $100 million to $115 million.
Quarterly Conference Call
LKQ will host a conference call and Webcast on February 23, 2012 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) 407-0315. International access to the call may be obtained by dialing (201) 689-8501. 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 account: 286 #, conference ID: 387182 #. An online replay of the audio webcast will be available on the Company's website. Both formats of replay will be available through March 23, 2012. Please allow approximately two hours after the live presentation before attempting to access the replay.
About LKQ Corporation
LKQ Corporation is the largest nationwide provider of aftermarket and recycled collision replacement parts and refurbished collision replacement products such as wheels, bumper covers and lights, and a leading provider of mechanical replacement parts including remanufactured engines, all in connection with the repair of automobiles and other vehicles. LKQ also has operations in the United Kingdom, Canada, Mexico and Central America. LKQ operates more than 440 facilities, offering its customers a broad range of replacement systems, components and parts to repair automobiles and light, medium and heavy-duty trucks.
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 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:
- uncertainty as to changes in North American and European general economic activity 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 parts;
- the availability and cost of our inventory;
- variations in vehicle accident rates or miles driven;
- changes in state or federal laws or regulations affecting our business;
- changes in the types of replacement parts that insurance carriers will accept in the repair process;
- 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;
- uncertainty as to the impact on our industry of any terrorist attacks or responses to terrorist attacks;
- our ability 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 fuel and other commodity prices;
- fluctuations in the prices of scrap metal and other metals;
- our ability to develop and implement the operational and financial systems needed to manage our operations;
- our ability to integrate and successfully operate acquired companies and any companies acquired in the future and the risks associated with these companies;
- claims by OEMs or others that attempt to restrict or eliminate the sale of aftermarket products:
- termination of business relationships with insurance companies that promote 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;
- currency fluctuations in the U.S. dollar versus the pound sterling, the Canadian dollar, the Mexican peso and the Taiwan dollar;
- periodic adjustments to estimated contingent purchase price amounts;
- instability in regions in which we operate, such as Mexico, that can affect our supply of certain products; and
- other risks that are described in our Form 10-K filed February 25, 2011 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.
Joseph P. Boutross
Director, Investor Relations