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LKQ Corporation Posts Record First Quarter 2012 Results
- Revenue growth of 31% to $1.03 billion
- First quarter 2012 diluted EPS increases 38%
- Updates 2012 guidance
Chicago, IL (April 26, 2012) - LKQ Corporation (Nasdaq:LKQX) today reported record revenue for the first quarter of 2012 of $1.03 billion, an increase of 31% as compared to $786.6 million in the first quarter of 2011. Net income for the first quarter of 2012 was $81.0 million, an increase of 39.2% as compared to $58.2 million for the same period of 2011. Diluted earnings per share of $0.54 for the first quarter ended March 31, 2012 increased 38% from $0.39 for the first quarter of 2011. The Company noted that the first quarter 2012 diluted earnings per share included a gain equal to $0.04 per share that resulted from a favorable legal settlement ($0.03) and a change in fair value of contingent consideration liabilities ($0.01). Earnings per share in the first quarter of 2011 included a charge of $0.02 per share as a result of loss on debt extinguishment.
"We are pleased to report that our quarterly revenue was in excess of $1 billion for the first time in our history. Despite the headwinds we faced in the quarter, we were able to generate record earnings," stated Robert L. Wagman, President and Chief Executive Officer of LKQ Corporation. "We are particularly pleased with the organic growth of our recycled, remanufactured and related products and services revenue. In the quarter, sales from those products grew organically 8.5% compared to the same period in 2011. We encountered softness in our collision product sales primarily due to the mild winter and the subsequent drop in reported insurance claims. Despite the mild winter and high gas prices, the Company reported 3.2% total organic growth and 3.6% organic growth for parts and services. Revenue growth from acquisitions was 28% in the quarter.”
“Cash flow from operations in excess of $110 million for the quarter improved our leverage to below two times. Our availability under our credit facility of over $500 million provides us with the operational flexibility we need to execute our strategy,” added John S. Quinn, Executive Vice President and Chief Financial Officer of LKQ Corporation.
Balance Sheet and Liquidity
As of March 31, 2012, LKQ’s balance sheet reflected cash and equivalents of $55.2 million, and the outstanding obligations under the Company’s credit facilities were $842.7 million ($437.5 million of term loans and $405.2 million of revolver borrowings). Total availability under the credit agreement at March 31, 2012 was $503.7 million. During the quarter the Company borrowed $200 million in term loans under its credit facility and used those proceeds to partially repay revolver debt.
During the first quarter, LKQ acquired four North American businesses that included a self-service operation in North Carolina, a paint distribution business in Canada, a light vehicle wholesale salvage operation with four locations in Quebec, and a distributor of remanufactured engines based in California.
During the first quarter, LKQ’s European operations opened nine Euro Car Parts branches in the United Kingdom.
On March 5, 2012, Blythe J. McGarvie was elected to LKQ’s Board of Directors.
The Company also announced that it is updating its guidance for 2012.
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 5.0% to 7.0%, net income will be in the range of $262 million to $282 million and diluted earnings per share will be in the range of $1.75 to $1.88. The revised guidance includes $0.03 per share from the legal settlement gain recognized in the first quarter 2012. LKQ's previous guidance was 5.5% to 7.5% for organic revenue growth for parts and services, $258 million to $278 million for net income, and $1.72 to $1.85 for diluted earnings per share.
The Company left unchanged its previous guidance of approximately $250 million to $280 million for cash flows from operating activities, and $100 million to $115 million in capital expenditures (excluding any acquisition related expenditures).
Quarterly Conference Call
LKQ will host a conference call and Webcast on April 26, 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. An 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: 391539 #. An online replay of the audio webcast will be available on the Company's website. Both formats of replay will be available through May 25, 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, recycled, and refurbished collision replacement parts, 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 450 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 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;
- 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 arrangements;
- 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 27, 2012 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.
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Joseph P. Boutross
Director, Investor Relations