CHICAGO, April 30, 2009 (GLOBE NEWSWIRE) -- LKQ Corporation (Nasdaq:LKQX) today announced results for its first quarter ended March 31, 2009. Revenue for the first quarter of 2009 was $518.0 million, an increase of 5.3% from $491.9 million in the first quarter of 2008. Net income for the first quarter of 2009 was $32.3 million, an increase of 4.6% from $30.9 million in the first quarter of 2008. Diluted earnings per share was $0.23 for the first quarter of 2009, as compared to $0.22 for the same period of last year.
"With most of the Keystone integration behind us, we began to see the benefits during the quarter of our earlier efforts to capture the 'first call' for replacement parts and realized organic revenue growth in both the aftermarket and recycled revenue categories," commented Joseph Holsten, President and Chief Executive Officer. "As demand, although still weak, for scrap metal improved, we were able to stabilize our self-service retail business and return it to profitability. The results for the quarter reinforce the resiliency of our businesses, despite the weak economic trends and continued declines in miles driven and insurance claims."
Mr. Holsten added, "Our settlement with Ford Motor Company was a major milestone for LKQ. It lifts a cloud of concern held by some of our vendors, partners and investors and gives us exclusive rights to sell aftermarket parts that correspond to Ford-patented collision repair parts. We will continue to promote the use of aftermarket, recycled and refurbished parts as cost-effective, quality alternatives to new OEM parts for collision repair."
For the first quarter of 2009, consolidated revenue, excluding Other Revenue, was $469.3 million, an increase of 9.1% as compared to $429.9 million for the first quarter of 2008. Organic revenue growth, excluding Other Revenue, was 5.1%. Organic revenue growth, including Other Revenue, was essentially flat because of the impact of lower commodity prices, primarily affecting our self-service retail operations.
Balance Sheet and Liquidity
As of March 31, 2009, LKQ's balance sheet reflected cash and equivalents of $92.8 million as compared to $79.1 million as of December 31, 2008. Debt as of March 31, 2009 was $638.6 million as compared to $642.9 million at the end of 2008. As of April 29, 2009, liquidity available under LKQ's revolving credit agreement was $66.8 million.
Recent Business Acquisitions
During the quarter, LKQ acquired a heavy-duty truck parts recycling operation in Tampa, Florida, and wholesale automobile salvage businesses in the Raleigh/Durham, North Carolina area and the Montreal, Quebec, Canada area. Historical annual revenue for the acquired businesses was approximately $18 million.
Company Outlook
The outlook for 2009 remains unchanged from the company's guidance provided in late February 2009. Organic revenue growth, excluding Other Revenue which will continue to be impacted by weak commodity prices, is projected to grow at a rate of 6% to 8%. Excluding the impact of any restructuring expenses, LKQ anticipates full year 2009 net income will be in the range of $114.5 million to $123.5 million and diluted earnings per share will be in the range of $0.80 to $0.86.
Net cash provided by operating activities for 2009 is projected to be approximately $145 million. Capital expenditures related to property and equipment, excluding expenditures for acquiring businesses, are projected to be in the range of $75 million to $80 million. Maintenance or replacement capital expenditures are expected to be less than $15 million.
Weighted average diluted shares outstanding are anticipated to be within a range of approximately 143 to 144 million for 2009. Share numbers are estimates and will be affected by factors such as future stock issuances, the number of options exercised in subsequent periods, and changes in stock price.
Quarterly Conference Call
LKQ will host a conference call and audio webcast to discuss its first quarter 2009 financial results on Thursday, April 30, 2009 at 10:30 a.m. Eastern Time. To access the investor conference call, please dial (877) 705-6006. International access to the call may be obtained by dialing (201) 689-8557. The 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) 689-8557 for international calls. The telephone replay will require you to enter -- account: #286; conference ID: #320883. 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 May 30, 2009. 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 OEM products and refurbished OEM collision replacement products such as wheels, bumper covers and lights used to repair light vehicles. LKQ operates approximately 280 facilities offering its customers a broad range of replacement systems, components, and parts to repair automobiles and light-duty trucks 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 OEM replacement parts; * the availability and cost of our inventory; * variations in vehicle accident rates; * changes in state or federal laws or regulations affecting our business; * changes in the types of replacements 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; * increasing 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 and other metals that could adversely affect our financial results; * 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; * the risk that Keystone's business will not be integrated successfully or that we will incur unanticipated costs of integration; * claims by original equipment manufacturers that attempt to restrict or eliminate the sale of aftermarket 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 27, 2009 and in other reports filed by us from time to time with the Securities and Exchange Commission.
You should not place undue reliance on the forward looking statements. We assume no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made 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,
----------------------
2009 2008
---- ----
Revenue $ 517,989 $ 491,908
Cost of goods sold 285,039 268,594
--------- ---------
Gross margin 232,950 223,314
Facility and warehouse expenses 50,663 44,502
Distribution expenses 44,542 44,769
Selling, general and administrative expenses 67,111 64,103
Restructuring expenses 803 1,174
Depreciation and amortization 8,453 7,258
--------- ---------
Operating income 61,378 61,508
Other expense (income):
Interest expense, net 7,580 10,301
Other income, net (40) (269)
--------- ---------
Total other expense 7,540 10,032
--------- ---------
Income before provision for income taxes 53,838 51,476
Provision for income taxes 21,534 20,598
--------- ---------
Net income $ 32,304 $ 30,878
========= =========
Net income per share:
Basic $ 0.23 $ 0.23
========= =========
Diluted $ 0.23 $ 0.22
========= =========
Weighted average common shares outstanding:
Basic 139,793 134,558
========= =========
Diluted 142,789 139,682
========= =========
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Balance Sheets
(In thousands, except share and per share data)
March 31, December 31,
2009 2008
---- ----
Assets
Current Assets:
Cash and equivalents $ 92,810 $ 79,067
Receivables, net 138,923 148,422
Inventory 359,772 332,756
Deferred income taxes 20,187 19,644
Prepaid income taxes 3,334 21,164
Prepaid expenses 12,212 7,865
---------- ----------
Total Current Assets 627,238 608,918
Property and Equipment, net 258,440 258,956
Intangibles 1,004,653 994,957
Other Assets 18,920 18,973
---------- ----------
Total Assets $1,909,251 $1,881,804
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 62,737 $ 65,411
Accrued expenses 71,011 75,135
Deferred revenue 5,341 4,733
Current portion of long-term obligations 23,528 21,934
---------- ----------
Total Current Liabilities 162,617 167,213
Long-Term Obligations, Excluding Current
Portion 615,031 620,940
Deferred Income Tax Liability 46,140 43,518
Other Noncurrent Liabilities 31,721 29,627
Commitments and Contingencies
Stockholders' Equity:
Common stock, $0.01 par value, 500,000,000
shares authorized, 140,008,741 and
139,921,410 shares issued at March 31, 2009
and December 31, 2008, respectively 1,400 1,399
Additional paid-in capital 793,235 790,933
Retained earnings 274,242 241,938
Accumulated other comprehensive loss (15,135) (13,764)
---------- ----------
Total Stockholders' Equity 1,053,742 1,020,506
---------- ----------
Total Liabilities and Stockholders' Equity $1,909,251 $1,881,804
========== ==========
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Statements of Cash Flows
( In thousands )
Three Months Ended
March 31,
------------------
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 32,304 $ 30,878
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 9,291 7,875
Stock-based compensation expense 1,711 1,304
Deferred income taxes 2,254 399
Excess tax benefit from share-based payment
arrangements (261) (1,103)
Other adjustments 592 (68)
Changes in operating assets and liabilities,
net of effects from purchase transactions:
Receivables 10,084 (8,338)
Inventory (24,789) (8,772)
Prepaid income taxes/income taxes payable 18,018 18,625
Accounts payable (2,546) (5,091)
Other operating assets and liabilities (7,133) (3,357)
-------- --------
Net cash provided by operating activities 39,525 32,352
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (6,918) (13,196)
Proceeds from disposal of assets 109 --
Cash used in acquisitions (15,756) (4,186)
-------- --------
Net cash used in investing activities (22,565) (17,382)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 331 939
Excess tax benefit from share-based payment
arrangements 261 1,103
Debt issuance costs -- (173)
Repayments under term loans (4,938) (2,495)
Borrowings under line of credit 2,310 --
Repayments of other long-term debt (1,162) (3,054)
-------- --------
Net cash used in financing activities (3,198) (3,680)
-------- --------
Effect of exchange rate changes on cash and
equivalents (19) (121)
Net increase in cash and equivalents 13,743 11,169
Cash and equivalents, beginning of period 79,067 74,241
-------- --------
Cash and equivalents, end of period $ 92,810 $ 85,410
======== ========
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Supplementary Data
( In thousands, except per share data )
Three Months Ended March 31,
-------------------------------------------------------
Operating
Highlights 2009 2008
------------- ----------------- -----------------
% of % of %
Revenue Revenue Change Change
Revenue $ 517,989 100.0% $ 491,908 100.0% $ 26,081 5.3%
Cost of
goods
sold 285,039 55.0% 268,594 54.6% 16,445 6.1%
--------- ------ --------- ------ ---------
Gross
margin 232,950 45.0% 223,314 45.4% 9,636 4.3%
Facility and
warehouse
expenses 50,663 9.8% 44,502 9.0% 6,161 13.8%
Distribution
expenses 44,542 8.6% 44,769 9.1% (227) -0.5%
Selling,
general and
admini-
strative
expenses 67,111 13.0% 64,103 13.0% 3,008 4.7%
Restructuring
expenses 803 0.2% 1,174 0.2% (371) -31.6%
Depreciation
and
amortization 8,453 1.6% 7,258 1.5% 1,195 16.5%
--------- ------ --------- ------ ---------
Operating
income 61,378 11.8% 61,508 12.5% (130) -0.2%
Other expense
(income):
Interest
expense,
net 7,580 1.5% 10,301 2.1% (2,721) -26.4%
Other
income,
net (40) 0.0% (269) -0.1% 229 -85.1%
--------- ------ --------- ------ ---------
Total
other
expense 7,540 1.5% 10,032 2.0% (2,492) -24.8%
--------- ------ --------- ------ ---------
Income
before
provision
for
income
taxes 53,838 10.4% 51,476 10.5% 2,362 4.6%
Provision for
income taxes 21,534 4.2% 20,598 4.2% 936 4.5%
--------- ------ --------- ------ ---------
Net income $ 32,304 6.2% $ 30,878 6.3% $ 1,426 4.6%
========= ====== ========= ====== =========
Net income
per share:
Basic $ 0.23 $ 0.23 $ -- 0.0%
========= ========= =========
Diluted $ 0.23 $ 0.22 $ 0.01 4.5%
========= ========= =========
Weighted
average
common
shares
outstanding:
Basic 139,793 134,558 5,235 3.9%
========= ========= =========
Diluted 142,789 139,682 3,107 2.2%
========= ========= =========
The following unaudited table reconciles EBITDA to net income:
Three Months
Ended March 31,
------------------
2009 2008
-------- --------
(In thousands)
Net income $ 32,304 $ 30,878
Depreciation and amortization 9,291 7,875
Interest expense, net 7,580 10,301
Provision for income taxes 21,534 20,598
-------- --------
Earnings before interest, taxes, depreciation
and amortization (EBITDA) $ 70,709 $ 69,652
======== ========
EBITDA as a percentage of revenue 13.7% 14.2%
We have typically provided a reconciliation of Net income to EBITDA
as we believe it provides investors, security 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 security analysts, investors, and other interested parties
in evaluating companies, many of which present EBITDA when
reporting their results.
The following unaudited table compares certain revenue categories:
Three Months
Ended March 31,
------------------
2009 2008
-------- --------
(In thousands)
Included in Consolidated Income Statements
of LKQ Corporation
Recycled and related products and services $187,572 $154,862
Aftermarket, other new and refurbished products 281,703 275,079
Other 48,714 61,967
-------- --------
$517,989 $491,908
======== ========