LKQ Corporation Announces Results for Third Quarter 2019

October 31, 2019

Revenue growth of 1% to $3.15 billion
Parts and services organic revenue increased 2.3%; 0.9% on a per day basis
Net income from continuing operations attributable to LKQ stockholders of $152 million (up 13%); adjusted net income of $189 million (up 6%)
Diluted EPS from continuing operations attributable to LKQ stockholders of $0.49 (up 17%); adjusted diluted EPS of $0.61 (up 9%)
Operating cash flow of $965 million (up 85%) year-to-date September 30 and free cash flow of $800 million (up 129%)
Repurchased 3.9 million shares for $101 million in the quarter and paid down $109 million of debt
$500 million increase to stock repurchase program announced, raising the aggregate authorization to $1 billion
2019 annual guidance updated

CHICAGO — LKQ Corporation (Nasdaq:LKQ) today reported revenue for the third quarter of 2019 of $3.15 billion, an increase of 0.8% as compared to $3.12 billion in the third quarter of 2018. For the third quarter of 2019, parts and services organic revenue increased 2.3% (0.9% on a per day basis), and acquisition revenue growth was 0.8%, while the impact of exchange rates was (2.3%), for total parts and services revenue growth of 0.8%.

Net income for the third quarter of 2019 was $152 million, an increase of 13% year-over-year. On an adjusted basis, net income was $189 million, an increase of 6% as compared to the $177 million for the same period of 2018. Diluted earnings per share1 for the third quarter of 2019 was $0.49 as compared to $0.42 for the same period of 2018, an increase of 17%. On an adjusted basis, diluted earnings per share for the third quarter of 2019 was $0.61, an increase of 9% as compared to $0.56 for the same period of 2018.

Dominick Zarcone, President and Chief Executive Officer of LKQ Corporation, stated: “Our focus on profitable revenue, margin expansion and cash conversion continued to yield positive results this quarter. Despite soft macroeconomic conditions in Europe and declining scrap prices, the Company was able to generate Segment EBITDA expansion, driven by a 60-basis point improvement in our North American segment. I am particularly pleased with the ongoing growth in cash flows as the Company added $327 million in operating cash flows this quarter.”

On a nine-month year-to-date basis, revenue was $9.5 billion, an increase of 7.0% from $8.9 billion for the comparable period of 2018.

Net income for the first nine months of 2019 was $400 million, a decrease of 10% as compared to $444 million for the first nine months of 2018 owing to the non-cash impairment charges in the first and second quarters of 2019. On an adjusted basis, net income for the first nine months of 2019 was $569 million, an increase of 5% as compared to the $539 million for the same period of 2018. Diluted earnings per share for the first nine months of 2019 was $1.28, a decrease of 9% as compared to $1.41 for the same period of 2018. On an adjusted basis, diluted earnings per share for the first nine months of 2019 was $1.82, an increase of 6% as compared to $1.71 for the same period of 2018.

Cash Flow and Balance Sheet

Cash flow from operations totaled $965 million on a nine-month year-to-date basis, up 85% from a year ago. Free cash flow totaled $800 million, up 129% year-over-year. The Company paid down $109 million of borrowings during the quarter, and as of September 30, 2019, the Company’s balance sheet reflected net debt of $3.5 billion. Net leverage as defined in the credit facility decreased to 2.6x EBITDA.

During the third quarter of 2019, the Company repurchased 3.9 million shares of common stock for a total consideration of $101 million. Since initiating the share repurchase program in October 2018, the Company has repurchased 13.2 million shares for a total of $352 million. On October 25, 2019, the Board of Directors authorized a $500 million increase to the repurchase program, raising the aggregate authorization to $1 billion and thus making available an aggregate balance of $648 million for potential additional repurchases anytime through October 2022.

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe 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.

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For additional details, including financial and supplementary data, view the full Press Release on the LKQ Investor Relations website.