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LKQ Corporation Announces Results for Fourth Quarter and Full Year 2012
• Annual revenue growth of 26% to a record $4.1 billion
• 2012 diluted EPS increases 22.5%
• Organic revenue growth for parts and services of 6.0%
• Completed 30 acquisitions in 2012
• Provides 2013 guidance
Chicago, IL (February 28, 2013) - LKQ Corporation (Nasdaq:LKQ) today announced results for its fourth quarter and full year ended December 31, 2012. Net income for the fourth quarter was $62.2 million and diluted earnings per share was $0.21, a 10.5% increase over the $0.19 reported for the fourth quarter in 2011. For the full year 2012, net income was $261.2 million and diluted earnings per share was $0.87, a 22.5% increase over the $0.71 reported for 2011. The Company noted that both full year 2012 and 2011 diluted earnings per share included a loss equal to $0.01 per share resulting from restructuring and acquisition related expenses and the change in fair value of contingent consideration liabilities. Additionally, full year 2012 diluted earnings per share included a $0.04 per share gain from the settlement of a previously disclosed lawsuit, and the 2011 results included a charge of $0.01 per share as a result of a loss on debt extinguishment.
"I am pleased with our 2012 results. Our Company was able to deliver solid growth across many financial performance metrics despite the multiple challenges we faced throughout the year. In 2012, the Company surpassed $4 billion in revenue for the first time and achieved 22.5% diluted EPS growth,” stated Robert Wagman, President and Chief Executive Officer of LKQ Corporation.
Mr. Wagman added, “In 2012, we completed a record 30 acquisitions in North America. This milestone is a testament to our strength in identifying and integrating businesses that allow us to expand our geographic footprint and broaden our product offerings to continue our growth.”
Fourth Quarter 2012 Reported Results
For the fourth quarter of 2012, revenue was $1.07 billion compared with $939.6 million for the fourth quarter of 2011, an increase of 13.7%. Net income for the fourth quarter was $62.2 million compared with $56.1 million in the prior year, an increase of 10.8%. For the fourth quarter, total organic revenue growth was 7.4%, and parts and services revenue grew organically by 8.2%. Acquisition revenue growth for the fourth quarter was 5.9%.
Full Year 2012 Reported Results
For the full year of 2012, revenue was $4.12 billion compared with $3.27 billion in 2011, an increase of 26.1%. Net income for the full year was $261.2 million compared with $210.3 million for the prior year, an increase of 24.2%. For the full year of 2012, total organic revenue growth was 4.1%, and parts and services revenue grew organically by 6.0%. Acquisition revenue growth for 2012 was 21.9%.
Balance Sheet and Liquidity
As of December 31, 2012, LKQ’s balance sheet reflected cash and equivalents of $59.8 million, and obligations outstanding under the Company’s credit facilities were $974.6 million ($420.6 million of term loans and $554.0 million of revolver borrowings). Total availability under the credit agreement at December 31, 2012 was $356.1 million.
During the fourth quarter of 2012, LKQ acquired an aftermarket parts distribution business with twelve locations in seven Canadian provinces; an aftermarket parts distribution business with three locations in Quebec, Canada; two self service businesses in Florida; an aftermarket parts distribution business in West Virginia; three paint distribution businesses with locations in Nebraska and Ohio; a bumper and fender distributor in Ontario, Canada; three wholesale salvage businesses with locations in Virginia, Minnesota, and South Carolina; two heavy duty truck aftermarket cooling and radiator businesses with two locations in Michigan and locations in Florida, Georgia and Missouri; two heavy duty truck salvage businesses with locations in Florida and Georgia; and a self service business with an adjacent auto shredder in Florida.
During the fourth quarter, LKQ’s European operations opened ten Euro Car Parts branches. As of December 31, 2012, the Company operated from 130 Euro Car Parts branches in the United Kingdom.
On January 2, 2013, Guhan Subramanian was elected to LKQ's Board of Directors.
Organic revenue growth for parts & services
5.5% to 7.5%
$305 million to $330 million
$1.00 to $1.09
Cash flow from operations
Approximately $300 million
$100 million to $115 million
Guidance for 2013 is based on current conditions and excludes the impact of restructuring and acquisition related expenses and gains or losses (including changes in fair value of contingent consideration liabilities) and capital spending related to acquisitions or divestitures. Organic revenue guidance refers only to parts and services revenue.
On August 17, 2012, the Company announced a two-for-one split of the Company’s common stock. The common stock began trading on a split-adjusted basis on September 19, 2012. All per share information in this release is presented on a split-adjusted basis.
Quarterly Conference Call
LKQ will host a conference call and Webcast on February 28, 2013 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: 408006 #. An online replay of the audio webcast will be available on the Company's website. Both formats of replay will be available through March 22, 2013. 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 500 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;
• inaccuracies in the data relating to industry size 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;
• 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 identify sufficient acquisition candidates at reasonable prices to maintain our growth objectives;
• 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 alternative automotive 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 other currencies and currency fluctuations in the pound sterling versus other currencies;
• 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;
• interruptions, outages or breaches of our operational systems, security systems, or infrastructure as a result of attacks on, or malfunctions of, our systems; 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.
Joseph P. Boutross
Director, Investor Relations