CHICAGO, July 30, 2009 (GLOBE NEWSWIRE) -- LKQ Corporation (Nasdaq:LKQX) today announced results for its second quarter ended June 30, 2009. Revenue for the second quarter of 2009 was $492.8 million, an increase of 1.7% from $484.4 million in the second quarter of 2008. Net income for the second quarter of 2009 was $28.9 million, as compared to $31.0 million in the second quarter of 2008. Diluted earnings per share was $0.20 for the second quarter of 2009, as compared to $0.22 for the same period of last year.
"All of the operating groups performed well during the quarter," commented Joseph Holsten, President and Chief Executive Officer. "Our aftermarket and recycled product businesses realized strong revenue gains, aided in part by good inventory levels. The revenue growth greatly mitigated the effect of lower commodity prices on our operating income during the quarter. Miles-driven appears to have stabilized, with modest increases during April and May. However, we believe there still are signs of economic weakness that are impacting our business."
For the second quarter of 2009, organic revenue declined by 3.3% as a result of the effect of lower commodity prices and fewer self service and crush-only vehicles on Other Revenue. Excluding the Other Revenue category, aftermarket and recycled product and service revenue was $446.6 million, an increase of 11.5% as compared to $400.6 million for the second quarter of 2008. Organic revenue growth, excluding Other Revenue, was 7.7% for the quarter, with relatively equal growth rates for the aftermarket, other new and refurbished products and the recycled products and services businesses.
On a six month year to date basis, revenue was $1.0 billion, an increase of 3.5% from $976.3 million for the same six month period of 2008. Net income for the first six months of 2009 was $61.2 million, as compared to $61.9 million for the first half of 2008. Diluted earnings per share was $0.43 for the first six months of 2009, as compared to $0.44 for the same six month period of 2008.
On a six month year to date basis, organic revenue declined by 1.9%; however, excluding Other Revenue, organic revenue growth was 6.3%.
"Recently, we acquired our sixth heavy-duty truck parts recycling business. Operating in Maryland from a nine acre recycling facility with a 77,000 square foot warehouse, the business provides us with significant efficiencies in both obtaining trucks under our national fleet acquisition programs and in the export of trucks and truck parts. While it had only $2.0 million of historical annual revenue, it provides a key presence near a port city along the eastern seaboard," added Mr. Holsten.
Balance Sheet and Liquidity
As of June 30, 2009, LKQ's balance sheet reflected cash and equivalents of $129.5 million as compared to $79.1 million as of December 31, 2008. Debt as of June 30, 2009 was $636.6 million as compared to $642.9 million at the end of 2008. Liquidity available under LKQ's revolving credit agreement was $65.3 million at the end of the quarter.
Company Outlook
Organic revenue growth, excluding Other Revenue, 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 $116.5 million to $124.0 million and diluted earnings per share will be in the range of $0.81 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 $71 million to $77 million. Maintenance or replacement capital expenditures are expected to be less than $15 million.
Weighted average diluted shares outstanding are anticipated to be approximately 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 second quarter 2009 financial results on Thursday, July 30, 2009 at 10:00 a.m. Eastern Time. To access the investor conference call, please dial (877) 551-8166. International access to the call may be obtained by dialing (201) 689-8789. 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) 612-7415 for international calls. The telephone replay will require you to enter -- account: #286; conference ID: #327947. 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 August 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 which are 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, 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 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 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; * 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; * 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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue $ 492,754 $ 484,392 $1,010,743 $ 976,300
Cost of goods sold 269,272 264,684 554,311 533,278
---------- ---------- ---------- ----------
Gross margin 223,482 219,708 456,432 443,022
Facility and warehouse
expenses 49,398 43,802 100,061 88,304
Distribution expenses 42,917 45,326 87,459 90,095
Selling, general and
administrative
expenses 67,087 61,759 134,198 125,862
Restructuring expenses 255 3,149 1,058 4,323
Depreciation and
amortization 8,429 7,258 16,882 14,516
---------- ---------- ---------- ----------
Operating income 55,396 58,414 116,774 119,922
Other expense
(income):
Interest expense, net 7,725 8,411 15,305 18,712
Other income, net (106) (451) (146) (720)
---------- ---------- ---------- ----------
Total other expense 7,619 7,960 15,159 17,992
---------- ---------- ---------- ----------
Income before
provision for
income taxes 47,777 50,454 101,615 101,930
Provision for income
taxes 18,920 19,465 40,454 40,063
---------- ---------- ---------- ----------
Net income $ 28,857 $ 30,989 $ 61,161 $ 61,867
========== ========== ========== ==========
Net income per share:
Basic $ 0.21 $ 0.23 $ 0.44 $ 0.46
========== ========== ========== ==========
Diluted $ 0.20 $ 0.22 $ 0.43 $ 0.44
========== ========== ========== ==========
Weighted average
common shares
outstanding:
Basic 140,223 135,287 140,009 134,922
========== ========== ========== ==========
Diluted 143,500 140,301 143,317 140,035
========== ========== ========== ==========
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Balance Sheets
(In thousands, except share and per share data)
June 30, December 31,
2009 2008
---- ----
Assets
Current Assets:
Cash and equivalents $ 129,468 $ 79,067
Receivables, net 138,813 148,422
Inventory 353,024 332,756
Deferred income taxes 20,713 19,644
Prepaid income taxes 4,995 21,164
Prepaid expenses 15,085 7,865
----------- -----------
Total Current Assets 662,098 608,918
Property and Equipment, net 261,970 258,956
Intangibles 1,006,154 994,957
Other Assets 20,370 18,973
----------- -----------
Total Assets $ 1,950,592 $ 1,881,804
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 58,454 $ 65,411
Accrued expenses 78,645 75,135
Deferred revenue 6,011 4,733
Current portion of long-term obligations 26,743 21,934
----------- -----------
Total Current Liabilities 169,853 167,213
Long-Term Obligations, Excluding Current
Portion 609,824 620,940
Deferred Income Tax Liability 47,048 43,518
Other Noncurrent Liabilities 31,114 29,627
Commitments and Contingencies
Stockholders' Equity:
Common stock, $0.01 par value, 500,000,000
shares authorized, 140,584,990 and
139,921,410 shares issued at June 30, 2009
and December 31, 2008, respectively 1,406 1,399
Additional paid-in capital 799,824 790,933
Retained earnings 303,099 241,938
Accumulated other comprehensive loss (11,576) (13,764)
----------- -----------
Total Stockholders' Equity 1,092,753 1,020,506
----------- -----------
Total Liabilities and Stockholders'
Equity $ 1,950,592 $ 1,881,804
=========== ===========
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Statements of Cash Flows
(In thousands)
Six Months Ended
June 30,
---------------------
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 61,161 $ 61,867
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 18,589 15,802
Stock-based compensation expense 3,578 2,715
Deferred income taxes 1,483 1,239
Excess tax benefit from share-based payment
arrangements (2,696) (1,958)
Other adjustments 1,393 1,177
Changes in operating assets and liabilities,
net of effects from purchase transactions:
Receivables 10,585 (11,919)
Inventory (16,709) (10,975)
Prepaid income taxes/income taxes payable 19,397 20,166
Accounts payable (7,110) (8,800)
Other operating assets and liabilities (2,632) (1,941)
--------- ---------
Net cash provided by operating activities 87,039 67,373
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (18,584) (26,404)
Proceeds from disposal of assets 839 217
Cash used in acquisitions (15,952) (4,418)
--------- ---------
Net cash used in investing activities (33,697) (30,605)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 2,744 1,408
Excess tax benefit from share-based payment
arrangements 2,696 1,958
Debt issuance costs -- (219)
Borrowings under line of credit 2,310 --
Repayments of long-term debt (11,160) (10,026)
--------- ---------
Net cash used in financing activities (3,410) (6,879)
--------- ---------
Effect of exchange rate changes on cash and
equivalents 469 (68)
Net increase in cash and equivalents 50,401 29,821
Cash and equivalents, beginning of period 79,067 74,241
--------- ---------
Cash and equivalents, end of period $ 129,468 $ 104,062
========= =========
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Supplementary Data
(In thousands, except per share data)
Three Months Ended June 30,
------------------------------------------------
Operating Highlights 2009 2008
------------------------------------ ---------------
% of % of
Revenue Revenue Change % Change
Revenue $492,754 100.0% $484,392 100.0% $ 8,362 1.7%
Cost of goods sold 269,272 54.6% 264,684 54.6% 4,588 1.7%
-------- ------ -------- ------ -------- -------
Gross margin 223,482 45.4% 219,708 45.4% 3,774 1.7%
Facility and
warehouse expenses 49,398 10.0% 43,802 9.0% 5,596 12.8%
Distribution
expenses 42,917 8.7% 45,326 9.4% (2,409) -5.3%
Selling, general and
administrative
expenses 67,087 13.6% 61,759 12.7% 5,328 8.6%
Restructuring
expenses 255 0.1% 3,149 0.7% (2,894) -91.9%
Depreciation and
amortization 8,429 1.7% 7,258 1.5% 1,171 16.1%
-------- ------ -------- ------ -------- -------
Operating income 55,396 11.2% 58,414 12.1% (3,018) -5.2%
Other expense
(income):
Interest expense,
net 7,725 1.6% 8,411 1.7% (686) -8.2%
Other income, net (106) 0.0% (451) -0.1% 345 -76.5%
-------- ------ -------- ------ -------- -------
Total other expense 7,619 1.5% 7,960 1.6% (341) -4.3%
-------- ------ -------- ------ -------- -------
Income before
provision for
income taxes 47,777 9.7% 50,454 10.4% (2,677) -5.3%
Provision for
income taxes 18,920 3.8% 19,465 4.0% (545) -2.8%
-------- ------ -------- ------ -------- -------
Net income $ 28,857 5.9% $ 30,989 6.4% $ (2,132) -6.9%
======== ====== ======== ====== ======== =======
Net income
per share:
Basic $ 0.21 $ 0.23 $ (0.02) -8.7%
======== ======== ========
Diluted $ 0.20 $ 0.22 $ (0.02) -9.1%
======== ======== ========
Weighted average
common shares
outstanding:
Basic 140,223 135,287 4,936 3.6%
======== ======== ========
Diluted 143,500 140,301 3,199 2.3%
======== ======== ========
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Supplementary Data
(In thousands, except per share data)
Six Months Ended June 30,
------------------------------------------------
Operating Highlights 2009 2008
------------------------------------ ---------------
% of % of
Revenue Revenue Change % Change
Revenue $1,010,743 100.0% $976,300 100.0% $ 34,443 3.5%
Cost of goods sold 554,311 54.8% 533,278 54.6% 21,033 3.9%
-------- ------ -------- ------ -------- -------
Gross margin 456,432 45.2% 443,022 45.4% 13,410 3.0%
Facility and
warehouse expenses 100,061 9.9% 88,304 9.0% 11,757 13.3%
Distribution
expenses 87,459 8.7% 90,095 9.2% (2,636) -2.9%
Selling, general
and administrative
expenses 134,198 13.3% 125,862 12.9% 8,336 6.6%
Restructuring
expenses 1,058 0.1% 4,323 0.4% (3,265) -75.5%
Depreciation and
amortization 16,882 1.7% 14,516 1.5% 2,366 16.3%
-------- ------ -------- ------ -------- -------
Operating income 116,774 11.6% 119,922 12.3% (3,148) -2.6%
Other expense
(income):
Interest expense,
net 15,305 1.5% 18,712 1.9% (3,407) -18.2%
Other income, net (146) 0.0% (720) -0.1% 574 -79.7%
-------- ------ -------- ------ -------- -------
Total other
expense 15,159 1.5% 17,992 1.8% (2,833) -15.7%
-------- ------ -------- ------ -------- -------
Income before
provision for
income taxes 101,615 10.1% 101,930 10.4% (315) -0.3%
Provision for
income taxes 40,454 4.0% 40,063 4.1% 391 1.0%
-------- ------ -------- ------ -------- -------
Net income $ 61,161 6.1% $ 61,867 6.3% $ (706) -1.1%
======== ====== ======== ====== ======== =======
Net income per
share:
Basic $ 0.44 $ 0.46 $ (0.02) -4.3%
======== ======== ========
Diluted $ 0.43 $ 0.44 $ (0.01) -2.3%
======== ======== ========
Weighted average
common shares
outstanding:
Basic 140,009 134,922 5,087 3.8%
======== ======== ========
Diluted 143,317 140,035 3,282 2.3%
======== ======== ========
The following unaudited table reconciles EBITDA to net income:
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
(In thousands)
Net income $ 28,857 $ 30,989 $ 61,161 $ 61,867
Depreciation and amortization 9,298 7,927 18,589 15,802
Interest expense, net 7,725 8,411 15,305 18,712
Provision for income taxes 18,920 19,465 40,454 40,063
-------- -------- -------- --------
Earnings before interest,
taxes, depreciation and
amortization (EBITDA) $ 64,800 $ 66,792 $135,509 $136,444
======== ======== ======== ========
EBITDA as a percentage
of revenue 13.2% 13.8% 13.4% 14.0%
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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
(In thousands) (In thousands)
Included in Consolidated
Income Statements of
LKQ Corporation
Recycled and related
products and services $ 185,895 $ 159,425 $ 373,467 $ 314,287
Aftermarket, other new
and refurbished
products 260,686 241,211 542,389 516,290
Other 46,173 83,756 94,887 145,723
---------- ---------- ---------- ----------
$ 492,754 $ 484,392 $1,010,743 $ 976,300
========== ========== ========== ==========