LKQ Corporation Announces Results for First Quarter 2021

April 29, 2020

First quarter revenue of $3.2 billion (up 5.7% ye ar-over-year)
Parts and services organic revenue increased 0.6% (2.2% on a per day basis)
Diluted EPS 1 of $0.88 (up 83.3%); adjusted diluted EPS 1 of $0.94 (up 64.9%)
First quarter Segment EBITDA margin of 19.9% for North America
Europe first quarter Segment EBITDA margin up 390 basis points to 9.6%
First quarter Segment EBITDA margin of 13.4% for Specialty
First quarter operating cash flow of $523 million (up 169% YoY); free cash flow of $481 million (up 220% YoY)
Net leverage down t o 1.4x EB ITDA
2021 outlook raised

CHICAGO — LKQ Corporation (Nasdaq:LKQ) today reported first quarter 2021 results that reflect strength for the Company in a number of key metrics including overall profitability, segment margins and free cash flow.

“We significantly exceeded our expectations for the quarter as our segment teams continue to embrace operational excellence and execute on our key initiatives. Our North America team delivered a 19.9% Segment EBITDA margin in the first quarter, the highest level in the Company’s history. Additionally, our Specialty team delivered its highest quarterly organic revenue growth at 30.9% and first quarter Segment EBITDA margin of 13.4%. I am also pleased with the Europe Segment EBITDA margin of 9.6% in the quarter, a year-over-year improvement of 390 basis points. This level of performance gives us confidence regarding the progress of our 1 LKQ Europe program and our team’s ability to achieve the longer-term margin targets we set forth in 2019,” noted Dominick Zarcone, President and Chief Executive Officer.

First Quarter 2021 Financial Results

Revenue for the first quarter of 2021 was $3.2 billion, an increase of 5.7% as compared to $3.0 billion in the first quarter of 2020. For the first quarter of 2021, parts and services organic revenue increased 0.6% (2.2% on a per day basis), while the net impact of acquisitions and divestitures decreased revenue 0.6% and foreign exchange rates increased revenue 4.2%, for a total parts and services revenue increase of 4.2%. The organic revenue growth for the quarter reflects the annualization of the initial pandemic impact last March. Through February, organic parts and services revenue was 4.4% lower on a per day basis, primarily as a result of mobility restrictions from COVID-19. In March 2021, compared to a lower prior year period, organic parts and services revenue grew by 15.7% on a per day basis. Other revenue grew 27.0% in the first quarter of 2021, driven by higher scrap steel and precious metals prices.

Net income¹ for the first quarter of 2021 was $266 million as compared to $146 million for the same period in 2020, an increase of 81.9%. Diluted earnings per share1 for the first quarter was $0.88 as compared to $0.48 for the same period of 2020, an increase of 83.3%.

On an adjusted basis, net income1 in the first quarter was $286 million compared to $176 million in the same period of 2020, a 62.4% increase. Adjusted diluted earnings per share1 for the first quarter was $0.94 as compared to $0.57 for the same period of 2020, a 64.9% increase.

¹ References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations attributable to LKQ stockholders.

Cash Flow and Balance Sheet

Cash flow from operations totaled $523 million during the first quarter of 2021, up 169% from a year ago. Free cash flow in the quarter totaled $481 million, up 220% year-over-year. We made $83 million of net repayments on borrowings during the first quarter. As of March 31, 2021, our balance sheet reflected net debt of $2.1 billion, down from $2.6 billion as of December 31, 2020. Net leverage, as defined in our credit facility, decreased to 1.4x EBITDA.

On April 1, 2021, we used a portion of the available liquidity to redeem the €750 million 3.625% Senior Notes due 2026. The redemption was financed by lower cost revolver borrowings and cash on hand.

During the first quarter of 2021, S&P Global and Moody’s upgraded our credit ratings to BB+ and Ba1, respectively.

In the first quarter of 2021, we repurchased approximately 1.5 million shares of our common stock. Since initiating our plan in late October 2018, we have repurchased 18.8 million shares for a total of $526 million.

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 OE recycled and aftermarket parts, replacement systems, components, equipment, and services 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.