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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, April 26, 2012 (GLOBE NEWSWIRE) -- 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. Other Events 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. Company Outlook 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.
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Statements of Income
( In thousands, except per share data )
Three Months Ended
March 31,
------------------------
2012 2011
------------ ----------
Revenue $ 1,031,777 $ 786,648
Cost of goods sold (1) 584,394 443,002
------------ ----------
Gross margin 447,383 343,646
Facility and warehouse
expenses 85,108 69,818
Distribution expenses 91,813 65,811
Selling, general and
administrative expenses 121,714 89,761
Restructuring and acquisition
related expenses 247 46
Depreciation and amortization 14,893 10,839
------------ ----------
Operating income 133,608 107,371
Other expense (income):
Interest expense, net 7,367 6,409
Loss on debt extinguishment -- 5,345
Change in fair value of
contingent consideration
liabilities (1,345) --
Other income, net (511) (106)
------------ ----------
Total other expense, net 5,511 11,648
------------ ----------
Income before provision for
income taxes 128,097 95,723
Provision for income taxes 47,106 37,541
------------ ----------
Net income $ 80,991 $ 58,182
============ ==========
Earnings per share:
Basic $ 0.55 $ 0.40
------------ ----------
Diluted $ 0.54 $ 0.39
------------ ----------
Weighted average common
shares outstanding:
Basic 147,139 145,611
============ ==========
Diluted 149,671 147,920
============ ==========
(1) Cost of goods sold for the three months ended March
31, 2012 includes a gain of $8.3 million resulting
from the settlement of a class action lawsuit against
several of our suppliers.
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Balance Sheets
( In thousands, except share and per share data )
December 31,
March 31,
2012 2011
------------ ------------
Assets
Current Assets:
Cash and equivalents $ 55,169 $ 48,247
Receivables, net 310,552 281,764
Inventory 736,641 736,846
Deferred income taxes 45,257 45,690
Prepaid income taxes -- 17,597
Prepaid expenses and other
current assets 26,659 19,591
------------ ------------
Total Current Assets 1,174,278 1,149,735
Property and Equipment, net 430,777 424,098
Intangibles 1,607,588 1,584,973
Other Assets 47,358 40,898
------------ ------------
Total Assets $ 3,260,001 $ 3,199,704
============ ============
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable $ 212,538 $ 210,875
Accrued expenses 123,186 131,025
Income taxes payable 28,852 7,262
Contingent consideration
liabilities 37,478 600
Other current liabilities 14,522 18,407
Current portion of long-term
obligations 40,498 29,524
------------ ------------
Total Current Liabilities 457,074 397,693
Long-Term Obligations,
Excluding Current Portion 856,068 926,552
Deferred Income Taxes 89,160 88,796
Contingent Consideration
Liabilities 45,431 81,782
Other Noncurrent Liabilities 67,183 60,796
Commitments and Contingencies
Stockholders' Equity:
Common stock, $0.01 par
value, 500,000,000 shares
authorized, 147,404,921 and
146,948,608 shares issued
and outstanding at March 31,
2012 and December 31, 2011,
respectively 1,474 1,470
Additional paid-in capital 913,930 902,782
Retained earnings 829,785 748,794
Accumulated other
comprehensive loss (104) (8,961)
------------ ------------
Total Stockholders' Equity 1,745,085 1,644,085
------------ ------------
Total Liabilities and
Stockholders' Equity $ 3,260,001 $ 3,199,704
============ ============
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Statements of Cash Flows
( In thousands )
Three Months Ended
March 31,
----------------------
2012 2011
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 80,991 $ 58,182
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 16,257 11,926
Stock-based compensation expense 4,010 3,342
Excess tax benefit from stock-based
payments (2,561) (2,460)
Loss on debt extinguishment -- 5,345
Other (702) 1,204
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Receivables (22,694) (19,039)
Inventory 13,000 2,678
Prepaid income taxes/income taxes
payable 41,324 33,769
Accounts payable (2,557) (9,658)
Other operating assets and liabilities (16,913) (7,974)
---------- ----------
Net cash provided by operating
activities 110,155 77,315
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (21,329) (18,093)
Proceeds from sales of property and
equipment 233 91
Cash used in acquisitions, net of cash
acquired (24,930) (43,517)
---------- ----------
Net cash used in investing activities (46,026) (61,519)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 4,581 2,610
Excess tax benefit from stock-based
payments 2,561 2,460
Debt issuance costs -- (7,741)
Borrowings under revolving credit
facility 150,932 341,753
Repayments under revolving credit
facility (410,851) (44,328)
Borrowings under term loans 200,000 250,000
Repayments under term loans (3,125) (591,089)
Payments of other obligations (1,845) (652)
---------- ----------
Net cash used in financing activities (57,747) (46,987)
---------- ----------
Effect of exchange rate changes on cash
and equivalents 540 19
Net increase (decrease) in cash and
equivalents 6,922 (31,172)
Cash and equivalents, beginning of period 48,247 95,689
---------- ----------
Cash and equivalents, end of period $ 55,169 $ 64,517
========== ==========
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Supplementary Data
( In thousands, except per share data )
Three Months Ended March 31,
---------------------------------------------------------------
Operating Highlights 2012 2011
----------------------------- --------------------- -------------------
% of % of %
Revenue Revenue Change Change
Revenue $ 1,031,777 100.0% $ 786,648 100.0% $ 245,129 31.2%
Cost of goods sold (1) 584,394 56.6% 443,002 56.3% 141,392
------------ ------- ---------- ------- ---------- 31.9%
Gross margin 447,383 43.4% 343,646 43.7% 103,737 30.2%
Facility and warehouse
expenses 85,108 8.2% 69,818 8.9% 15,290 21.9%
Distribution expenses 91,813 8.9% 65,811 8.4% 26,002 39.5%
Selling, general and
administrative expenses 121,714 11.8% 89,761 11.4% 31,953 35.6%
Restructuring and acquisition
related expenses 247 0.0% 46 0.0% 201 437.0%
Depreciation and amortization 14,893 1.4% 10,839 1.4% 4,054
------------ ------- ---------- ------- ---------- 37.4%
Operating income 133,608 12.9% 107,371 13.6% 26,237 24.4%
Other expense (income):
Interest expense, net 7,367 0.7% 6,409 0.8% 958 14.9%
Loss on debt extinguishment -- 0.0% 5,345 0.7% (5,345) -100.0%
Change in fair value of
contingent consideration
liabilities (1,345) -0.1% -- 0.0% (1,345) n/m
Other income, net (511) 0.0% (106) 0.0% (405)
------------ ------- ---------- ------- ---------- 382.1%
Total other expense, net 5,511 0.5% 11,648 1.5% (6,137)
------------ ------- ---------- ------- ---------- -52.7%
Income before provision for
income taxes 128,097 12.4% 95,723 12.2% 32,374 33.8%
Provision for income taxes 47,106 4.6% 37,541 4.8% 9,565
------------ ------- ---------- ------- ---------- 25.5%
Net income $ 80,991 7.8% $ 58,182 7.4% $ 22,809
============ ======= ========== ======= ========== 39.2%
Earnings per share:
Basic $ 0.55 $ 0.40 $ 0.15
------------ ---------- ---------- 37.5%
Diluted $ 0.54 $ 0.39 $ 0.15
------------ ---------- ---------- 38.5%
Weighted average common
shares outstanding:
Basic 147,139 145,611 1,528
============ ========== ========== 1.0%
Diluted 149,671 147,920 1,751
============ ========== ========== 1.2%
(1) Cost of goods sold for the three months ended March 31, 2012 includes a gain of $8.3
million resulting from the settlement of a class action lawsuit against several of our
suppliers.
The following unaudited table reconciles net income to EBITDA:
Three Months Ended
March 31,
----------------------
2012 2011
---------- ----------
(In thousands)
Net income $ 80,991 $ 58,182
Depreciation and amortization 16,257 11,926
Interest expense, net 7,367 6,409
Loss on debt extinguishment (1) -- 5,345
Provision for income taxes 47,106 37,541
---------- ----------
Earnings before interest, taxes,
depreciation and amortization (EBITDA) $ 151,721 $ 119,403
========== ==========
EBITDA as a percentage of revenue 14.7% 15.2%
(1) Loss on debt extinguishment is considered a component of
interest in calculating EBITDA, as the write-off of debt
issuance costs is similar to the treatment of debt issuance
cost amortization.
We provide a reconciliation of Net Income to EBITDA as we
believe it offers investors, securities analysts and other
interested parties useful information regarding our results of
operations because it assists in analyzing our performance and
the value of our business. EBITDA provides insight into our
profitability trends, and allows management and investors to
analyze our operating results with and without the impact of
depreciation, amortization, interest and income tax expense. We
believe EBITDA is used by securities analysts, investors, and
other interested parties in evaluating companies, many of which
present EBITDA when reporting their results. EBITDA should not
be construed as an alternative to operating income, net income
or net cash provided by (used in) operating activities, as
determined in accordance with accounting principles generally
accepted in the United States. In addition, not all companies
that report EBITDA information calculate EBITDA in the same
manner as we do and, accordingly, our calculation is not
necessarily comparable to similarly named measures of other
companies and may not be an appropriate measure for performance
relative to other companies.
The following unaudited tables compare certain revenue categories:
Three Months Ended March
31,
------------------------
%
2012 2011 Change Change
------------ ---------- ---------- ------
(In thousands)
Included in Unaudited Consolidated Condensed
Statements of Income of LKQ Corporation
Aftermarket, other new and refurbished products $ 565,344 $ 381,116 $ 184,228 48.3%
Recycled, remanufactured and related products and
services 325,704 275,782 49,922
------------ ---------- ---------- 18.1%
Parts and services 891,048 656,898 234,150 35.6%
Other 140,729 129,750 10,979
------------ ---------- ---------- 8.5%
Total $ 1,031,777 $ 786,648 $ 245,129
============ ========== ========== 31.2%
Revenue changes by category for the three months ended March 31, 2012 vs. 2011:
Revenue Change Attributable to:
------------------------------------
Foreign %
Acquisition Organic Exchange Change
------------ ---------- ---------- ------
Aftermarket, other new and refurbished products 48.4% 0.1% -0.1% 48.3%
Recycled, remanufactured and related products and
services 9.7% 8.5% -0.1% 18.1%
Parts and services 32.2% 3.6% -0.1% 35.6%
Other 6.9% 1.6% 0.0% 8.5%
Total 28.0% 3.2% -0.1% 31.2%
The following unaudited table compares our
revenue and EBITDA by reportable segment:
Three Months Ended
March 31,
------------------------
2012 2011
------------ ----------
(In thousands)
Revenue
North America $ 871,084 $ 786,648
Europe 160,693 --
------------ ----------
Total revenue $ 1,031,777 $ 786,648
============ ==========
EBITDA
North America (1) $ 132,188 $ 119,403
Europe (2) 19,533 --
------------ ----------
Total EBITDA $ 151,721 $ 119,403
============ ==========
(1) For the three months ended March 31,
2012, North America EBITDA includes a gain
of $8.3 million resulting from the
settlement of a class action lawsuit
against several of our suppliers.
(2) For the three months ended March 31,
2012, Europe EBITDA includes $1.3 million
of income from the change in fair value of
the Euro Car Parts contingent consideration
liability.
This news release was distributed by GlobeNewswire, www.globenewswire.com SOURCE: LKQ Corporation CONTACT: Joseph P. Boutross Director, Investor Relations (312) 621-2793 jpboutross@lkqcorp.com |