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Letter to the Editor
Monday October 31
LKQ Corporation Posts Record 3Q 2011 Results
LKQ Corporation has reported revenue for the third quarter of 2011 of $783.9 million, an increase of 29.0 percent as compared to $607.6 million in the third quarter of 2010. Income from continuing operations for the third quarter of 2011 was $49.2 million, an increase of 37.1 percent as compared to $35.9 million for the same period of 2010. Diluted earnings per share from continuing operations of $0.33 for the third quarter ended September 30, 2011 increased 32.0 percent from $0.25 for the third quarter of 2010. The company noted that the third quarter 2011 diluted earnings per share results included a charge equal to $0.01 for restructuring and acquisition costs."We are very pleased with the strength of the quarter," stated Robert Wagman, President and Co-Chief Executive Officer of LKQ Corporation. "The company delivered total organic revenue growth of 11.1 percent in the quarter, including 7.6 percent for parts and services. We are particularly pleased with the organic growth of our recycled, remanufactured and related services business. In the first nine months of 2011, that business grew organically 10.1 percent compared to the same period in 2010."
Joseph Holsten, Acting Chairman of the Board and Co-Chief Executive Officer, added, "Acquisitions in the U.S. continue to be a key growth strategy for us to build out our domestic footprint. In addition, we continue to seek additional growth markets for the Company as witnessed by our recent acquisition of Euro Car Parts, the largest distributor of automotive aftermarket parts in the United Kingdom."
On a nine month year-to-date basis, revenue was $2.33 billion, an increase of 29.8 percent from $1.80 billion for the same nine month period of 2010. Income from continuing operations for the first nine months of 2011 was $154.1 million, as compared to $125.8 million for the nine months of 2010. Diluted earnings per share from continuing operations was $1.04 for the first nine months of 2011, as compared to $0.86 for the same nine month period of 2010.
Organic revenue growth on a nine month year-to-date basis was 12.3 percent. Parts and services revenue grew organically by 8.8 percent. Acquisition revenue growth on a nine month year-to-date basis was 17.2 percent.
As of September 30, 2011, LKQ's balance sheet reflected cash and equivalents of $45.1 million, and the outstanding obligations under the company's credit facilities were $618.4 million ($243.8 million of term loans and $374.6 million of revolver borrowings). Total availability under the credit agreement at September 30, 2011 was $740.0 million, composed of $540.0 million on the revolver and $200.0 million on the delayed draw term loan. After giving effect to the October borrowing to finance the Euro Car Parts acquisition, total availability was $414.4 million.
During the third quarter, LKQ acquired ten businesses that included three heavy duty truck businesses with locations in California, Washington, Montana, and Oregon; three wholesale salvage businesses in California, Idaho, and Minnesota; one automotive cooling parts distribution business in North Carolina; two self service businesses in Texas and California; and one engine remanufacturing business in Washington.
On September 30, 2011, LKQ amended its March 25, 2011 credit agreement to increase the credit facility to $1.4 billion from $1.0 billion.
On October 3, 2011, the company announced the acquisition of Euro Car Parts, the largest distributor of automotive aftermarket parts in the United Kingdom.
The company noted that on October 10, 2011 Donald F. Flynn, Founder and Chairman of the Board of Directors, passed away. Joe Holsten has been appointed to the position of Acting Chairman.
LKQ also announced that it is raising guidance for income from continuing operations to $204 - $212 million from $201 - $211 million, and organic growth to 7 - 8 percent from 6 - 8 percent for parts and services revenue, reflecting strong third quarter results.Full year earnings guidance includes the projected income of Euro Car Parts from the acquisition date to year-end.
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 430 facilities, offering its customers a broad range of replacement systems, components and parts to repair automobiles and light, medium and heavy-duty trucks.
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