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LKQ Corporation Announces Results for First Quarter 2016

CHICAGO, Apr 28, 2016 (GLOBE NEWSWIRE via COMTEX) --

  • Revenue growth of 8.3% to $1.92 billion; 10.0% on a constant currency basis
  • Organic revenue growth for parts and services of 6.3%
  • Net income growth of 0.6%; adjusted net income growth of 10.2%
  • First quarter 2016 diluted EPS of $0.35; adjusted diluted EPS of $0.42
  • Annual guidance increased due to recent acquisitions

LKQ Corporation LKQ, +0.62% today reported record revenue for the first quarter of 2016 of $1.92 billion, an increase of 8.3% as compared to $1.77 billion in the first quarter of 2015. Net income for the first quarter of 2016 was $107.7 million, an increase of 0.6% as compared to $107.1 million for the same period of 2015. On an adjusted basis, net income was $128.7 million, an increase of 10.2% as compared to $116.8 million for the same period of 2015. Diluted earnings per share of $0.35 for the first quarter ended March 31, 2016 was unchanged from the $0.35 for the first quarter of 2015. On an adjusted basis, diluted earnings per share was $0.42 in the first quarter of 2016 reflecting a 10.5% increase over $0.38 for the first quarter of 2015. See the reconciliation of net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share included with this press release.

"Our first quarter results were impressive, and I believe that our recently-completed strategic acquisitions, credit facility amendment and European bond offering position us to continue delivery of organic and acquisition-related revenue growth," stated Robert Wagman, President and Chief Executive Officer of LKQ Corporation. "I am particularly pleased with the 12.3% revenue growth in parts and services on a constant currency basis. Our Europe segment continued to show solid improvement, with its EBITDA margins for the quarter increasing 100 basis points over the prior year. Despite the mild weather we faced globally, organic revenue growth for parts and services was a solid 6.3%, including 10.8% in our Specialty segment."

Balance Sheet and Liquidity

In January 2016, the Company completed an amendment to its credit facility that increased the aggregate amount available thereunder from $2.3 billion to $3.2 billion and extended the maturity to January 2021. The Company borrowed $1.2 billion on its credit facilities to fund its March acquisition of Rhiag-Inter Auto Parts Italia S.p.A ("Rhiag").

Cash flow from operations totaled $119 million during the first quarter, and the Company invested approximately $50 million in capital expenditures and other long term assets. As of March 31, 2016, LKQ's balance sheet reflected cash and equivalents of $229 million and outstanding debt of $2.8 billion. Total availability under the Company's credit facility at March 31, 2016 was approximately $1.1 billion.

Other Events

On March 18, 2016, the Company completed its previously announced acquisition of Rhiag, a leading Pan-European business-to-business distributor of aftermarket spare parts for passenger cars and commercial vehicles. Rhiag operates through 252 distribution centers and 10 warehouses, and serves more than 100,000 professional clients in 10 European countries.

On April 14, 2016, LKQ Italia Bondco S.p.A., an indirect, wholly-owned subsidiary of LKQ Corporation, completed an offering of EUR 500 million aggregate principal amount of 3.875% senior notes due 2024.

On April 21, 2016, the Company completed its previously-announced acquisition of Pittsburgh Glass Works LLC ("PGW"). PGW is a leading global distributor and manufacturer of automotive glass products. PGW operates approximately 120 distribution branches serving over 7,000 automotive glass retailer shops across North America. In addition, PGW operates 12 manufacturing, fabrication and assembly facilities.

In addition to the Rhiag and PGW acquisitions, during the first quarter of 2016 the Company acquired a wholesale salvage business in Sweden.

Company Outlook

Now that we have completed the acquisitions of Rhiag and PGW, we have updated our guidance for several financial metrics to include the impact of those transactions.

Updated Guidance Prior Guidance
Organic revenue growth (parts & services) 6.0% to 8.0% 6.0% to 8.0%
Adjusted net income $545 million to $575 million $490 million to $520 million
Adjusted diluted EPS $1.76 to $1.86 $1.59 to $1.69
Cash flow from operations $575 million to $625 million $520 to $550 million
Capital expenditures $200 million to $225 million $170 million to $180 million

Our revised 2016 guidance is based on current conditions (including acquisitions completed through April 28, 2016) and excludes the impact of restructuring and acquisition related expenses; loss on debt extinguishment; amortization of acquired intangibles; gains or losses related to acquisitions or divestitures (including changes in the fair value of contingent consideration liabilities); and capital spending related to future business acquisitions.

Guidance for 2016 is based on scrap prices remaining at current prices and exchange rates for the British pound, Euro and Canadian dollar holding near current levels. Changes in these figures may impact our ability to achieve the full year earnings and cash flow guidance.

Conference Call Details

On April 28, 2016 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) members of senior management will host a conference call and Webcast 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.

Webcast and Presentation Details

The audio webcast and accompanying slide presentation can be accessed 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: 13634367#. An online replay of the audio webcast will be available on the Company's website. Both formats of replay will be available through May 20, 2016. Please allow approximately two hours after the live presentation before attempting to access the replay.

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts, and automotive glass to repair and accessorize automobiles and other vehicles. LKQ is also a leader in the design, production and supply of automotive glass to OEMs. LKQ has operations in North America, Europe, China and Taiwan. LKQ offers its customers a broad range of replacement systems, components, equipment and parts to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

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 outlook, guidance, expectations, beliefs, hopes, intentions and 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 the following (not necessarily in order of importance):

  • changes in economic and political activity in the U.S. and other countries in which we are located or do business, and the impact of these changes on the demand for our products and our ability to obtain financing for operations;
  • increasing competition in the automotive parts industry;
  • fluctuations in the pricing of new original equipment manufacturer ("OEM") replacement products;
  • changes in the level of acceptance and promotion of alternative automotive parts by insurance companies and auto repairers;
  • changes to our business relationships with insurance companies or changes by insurance companies to their business practices...

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