CHICAGO, Oct. 28, 2010 (GLOBE NEWSWIRE) -- LKQ Corporation (Nasdaq:LKQX) today reported diluted earnings per share from continuing operations of $0.25 for the third quarter ended September 30, 2010, an increase of 19.0% from $0.21 for the third quarter of 2009. Revenue for the third quarter was $607.6 million, an increase of 22.8% as compared to $494.8 million for the same period of 2009. Income from continuing operations for the third quarter of 2010 was $35.9 million, an increase of 19.1% as compared to $30.1 million for the same period of 2009.
"We were very pleased with the strength of the quarter," stated Joseph Holsten, President and Chief Executive Officer of LKQ Corporation. "As insurers and consumers focus on containing repair costs, demand for quality alternative parts continues to expand." Mr. Holsten continued, "Parts and services revenue was up 18.8% in the third quarter with organic revenue growth of 8.3% and acquisition growth of 10.2%. We were particularly pleased to see recycled parts and services organic revenue growth of 8.0%. As we move into the busy winter season our inventories continue to be in very good shape."
Overall organic revenue growth for the third quarter was 11.6% as a result of strong parts sales and higher commodity prices as compared to last year.
On a nine month year to date basis, revenue was $1.8 billion, an increase of 20.4% from $1.5 billion for the same period of 2009. Income from continuing operations for the first nine months of 2010 was $125.8 million, as compared to $90.6 million for the same nine month period of 2009. Diluted earnings per share from continuing operations was $0.86 for the first nine months of 2010, as compared to $0.63 for the same period of 2009.
Acquisitions / New Locations
LKQ continued its expansion efforts and made a number of acquisitions during the third quarter. The acquired businesses provide additional wholesale aftermarket and recycled parts distribution in a number of markets including Philadelphia and Cincinnati, increase production capacity for the wheel refinishing business, and expand paint distribution in the Boston metropolitan market. Collectively, the businesses acquired during the quarter have annualized revenue of approximately $115 million, with roughly 40% related to low margin smelting operations that support the wheel refinishing business.
During the third quarter, the Company also opened a heavy-duty truck operation in Wilson, North Carolina at a former Greenleaf location. At the start of the fourth quarter, LKQ opened a greenfield wholesale recycling facility in Denver, Colorado.
"It was a very busy quarter for acquisitions and we are on pace to close a number of additional transactions by the end of 2010," commented Mr. Holsten. "Acquisitions will continue to play an important part of our plans to build out our footprint in the U.S. and Canada and expand our product offerings."
Balance Sheet and Liquidity
As of September 30, 2010, LKQ's balance sheet reflected cash and equivalents of $168.7 million and long-term debt, including the current portion, of $597.5 million. Availability on the Company's $100.0 million revolving credit facility was $79.9 million.
Company Outlook
LKQ updated its guidance for 2010. Income from continuing operations and diluted earnings per share from continuing operations are anticipated to be within the range of $162 million to $168 million and $1.11 to $1.15, respectively.
Net cash provided by operating activities for 2010 is projected to be in excess of $165 million. LKQ's capital expenditures related to property and equipment are expected to be within a range of $65 to $75 million.
The guidance reflects an organic growth rate from parts and services of 6% to 8%, excluding the impact of organic growth of other revenue. Additionally, all of the guidance provided excludes restructuring expenses and any gains or losses related to acquisitions or divestitures.
Quarterly Conference Call
LKQ will host a conference call and audio webcast to discuss its third quarter 2010 financial results and financial guidance on Thursday, October 28, 2010 at 10:00 a.m. Eastern Time. To participate in the conference call, please dial (877) 705-6008or (201) 689-8481 if calling outside of the U.S. The live audio webcast can be accessed on the internet at 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 number: 286 and conference ID: 359133. An online replay of the webcast will be available on the Company's website. Both forms of the replay of the conference call will be available until November 28, 2010. 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 collision replacement products, recycled products and refurbished collision replacement products such as wheels, bumper covers and lights. LKQ operates more than 300 facilities, providing 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 U.S. 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 parts;
- the availability and cost of our inventory;
- variations in vehicle accident rates or miles driven;
- 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;
- the amount and timing of operating costs and capital expenditures relating to the maintenance and expansion of our business, operations and infrastructure;
- competition in the automotive parts industry;
- our ability to increase or maintain revenue and profitability at our facilities;
- uncertainty as to our future profitability on a consolidated basis;
- 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;
- decreases in the supply of end of life and crush only vehicles that we process and sell for scrap; and
- other risks that are described in our Form 10-K filed February 26, 2010 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.
We provide a reconciliation of Income from Continuing Operations 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.
CONTACT: LKQ Corporation Sarah Lewensohn, Director, Investor Relations (312) 621-2793