LKQ Corporation Announces 2008 Third Quarter Results With Net Income Up Over 72 Percent
biz.yahoo.com
Thursday October 30, 7:00 am ET
CHICAGO, Oct. 30, 2008 (GLOBE NEWSWIRE) -- LKQ Corporation (NasdaqGS:LKQX) today announced results for its third quarter ended September 30, 2008. Revenue for the third quarter was $490.7 million. Net income for the quarter was $25.1 million and diluted earnings per share was $0.18. The results of the quarter include the effect of restructuring expenses of $2.4 million, a reduction of approximately $0.01 in diluted earnings per share. LKQ acquired Keystone Automotive Industries in October 2007, and accordingly, year over year results are not comparable.
``The third quarter results were consistent with our expectations and benefited from the diversity of our operating model. Excluding the impact of restructuring expenses, we improved operating margins by 20 basis points in the quarter that is traditionally the weakest,'' commented Joseph Holsten, President and Chief Executive Officer. ``We saw double digit organic growth despite reported reductions in auto insurance claims, demonstrating the resiliency of our businesses. While the recycled portion of our business continues to see steady growth, the current economic realities appear to be constraining the growth of aftermarket sales.''
``Although the economic environment is somewhat unpredictable, we are maintaining our focus and continuing to execute on our strategy - to be the leader in alternative auto and light-duty truck parts. Our recent acquisitions of recycled heavy-duty truck parts operations will help us expand into a complementary segment,'' added Holsten.
2008 Reported Results
For the third quarter of 2008, revenue increased 102% to $490.7 million compared with $243.5 million for the third quarter of 2007. Organic revenue growth for the quarter was 12.4%, and was calculated on a pro forma basis assuming LKQ owned Keystone during the third quarter of 2007. Net income for the quarter increased 72.2% to $25.1 million compared with $14.6 million for the third quarter of 2007. Diluted earnings per share was $0.18 for the quarter, an increase of 38.5%, as compared with $0.13 for the third quarter of 2007.
On a nine month year to date basis, revenue increased by 106% to $1.47 billion compared to $712.1 million for the same period of 2007. Pro forma organic revenue growth, assuming LKQ owned Keystone for the same year to date period of 2007, was 11.6%. Net income for the first nine months of 2008 increased 95.9% to $86.9 million as compared to $44.4 million in the prior year, and diluted earnings per share increased 59.0% to $0.62 as compared to $0.39.
The Company recorded restructuring expenses of $2.4 million in its third quarter of 2008 and $6.7 million for the nine month period of 2008. Restructuring costs were included in operating expenses and were related to the Keystone acquisition in October 2007.
The weighted average diluted shares outstanding for the third quarter of 2008 were 141.2 million compared to 115.1 million for the third quarter of 2007. The number of weighted average diluted shares of common stock in 2008 increased from 2007, due largely to the issuance of 23.6 million new shares on September 25, 2007 in a follow-on public offering and the issuance of 2.9 million shares related to business acquisitions.
Balance Sheet and Liquidity
As of September 30, 2008, LKQ's balance sheet reflected cash and equivalents of $97.7 million compared to $104.1 million as of June 30, 2008. Long-term debt, including the current portion, was $642.5 million at the end of the third quarter as compared to $647.4 million at the end of the second quarter of 2008. The Company has not made any borrowings on its revolving credit facility; however, availability has been reduced by the issuance of letters of credit totaling $21.7 million.
Recent Business Acquisitions
During the third quarter, LKQ completed the acquisition of Pick-Your-Part Auto Wrecking, an auto recycler with nine locations in California. More recently the Company announced the acquisition of two heavy-duty truck recycled parts businesses. The three acquisitions collectively had approximately $135 million of historical annual revenue.
Company Outlook
``The economic downturn with the effects of lower miles driven, fewer insurance claims and decreased commodity prices will undoubtedly affect us in the short run,'' commented Holsten. ``We continue to be optimistic, however, about our long-term strategy. In the long run we are in a favorable position to increase our market share by using our strong balance sheet and positive free cash flow to maintain high levels of inventory, which in turn should result in industry leading fulfillment rates for all of our product lines.''
As a result of challenging economic conditions, the Company is modifying its outlook for 2008. Excluding the effect of any 2008 restructuring expenses related to the Keystone acquisition, LKQ now anticipates full year 2008 net income to be within a range of $107 million to $114 million and diluted earnings per share to be between $0.76 and $0.81, representing a 38% to 47% increase from diluted earnings per share for 2007. LKQ's new guidance is greater than the full year 2008 guidance it originally provided on February 27, 2008. |
