LKQ Corporation Announces Results for Fourth Quarter and Full Year 2022

February 23, 2023

Fourth quarter 2022 revenue of $3.0 billion; parts and services organic revenue increased 4.5% (5.9% on a per day basis); annual increase of 5.0% (5.2% on a per day basis)
Record fourth quarter segment EBITDA margins for Wholesale – North America and Europe of 18.5% (330 basis point increase) and 10.0% (110 basis point increase), respectively
Fourth quarter 2022 diluted EPS of $0.72 (down 11.1%); adjusted diluted EPS of $0.78 (down 10.3%)
Higher tax provision than prior guidance lowered fourth quarter 2022 diluted EPS and adjusted diluted EPS by $0.05
Fourth quarter negative effect of $0.03 from increased interest expense
Annual diluted EPS of $4.11 (up 12.3%); adjusted diluted EPS of $3.85 (down 2.8%)
Annual operating cash flow of $1.25 billion; free cash flow of $1.0 billion
Dividend of $0.275 per share approved to be paid in the first quarter of 2023
Deployed $1.04 billion in 2022 to repurchase 20.5 million shares

CHICAGO — LKQ Corporation (Nasdaq:LKQ) today reported fourth quarter and full year 2022 financial results. “The fourth quarter was a solid operational finish to 2022. Our Wholesale – North America and Europe segments again delivered outstanding organic revenue growth and solid margins, exceeding our expectations for the quarter and year. Importantly, our global teams delivered these results in the midst of rampant inflation, supply chain disruptions, a tight labor market, lower commodity prices, and volatile exchange rates. The execution of our strategy, the resiliency of our business model, and the strength of our balance sheet have the Company well positioned to continue its success and performance in 2023,” noted Dominick Zarcone, President and Chief Executive Officer.

Fourth Quarter and Full Year 2022 Financial Results

Revenue for the fourth quarter of 2022 was $3.0 billion, a decrease of 5.8% as compared to $3.2 billion in the fourth quarter of 2021. On a constant currency basis1, fourth quarter revenue decreased by 0.1%. For the fourth quarter of 2022, parts and services organic revenue increased 4.5% (5.9% on a per day basis), while the net impact of acquisitions and divestitures decreased revenue by 3.1% and foreign exchange rates decreased revenue by 6.1%, for a total parts and services revenue decrease of 4.8%. Other revenue fell 20.1% in the fourth quarter of 2022 primarily due to weaker commodity prices relative to the same period in 2021.

Net income for the fourth quarter of 2022 was $193 million as compared to $235 million for the same period in 2021. Diluted earnings per share for the quarter was $0.72 as compared to $0.81 for the same period of 2021, a decrease of 11.1%.

On an adjusted basis, net income in the fourth quarter of 2022 was $209 million as compared to $254 million for the same period of 2021, a decrease of 17.5%. Adjusted diluted earnings per share for the fourth quarter of 2022 was $0.78 as compared to $0.87 for the same period of 2021, a decrease of 10.3%.

The effective tax rate for the fourth quarter of 2022 was 29.7%, which reflected adjustments to true-up the calculated full year effective rate as well as discrete tax expenses.

Revenue for the full year of 2022 was $12.8 billion, a decrease of 2.3% as compared to $13.1 billion for the full year of 2021. On a constant currency basis1, full year 2022 revenue increased by 2.8% to $13.5 billion. For the full year of 2022, parts and services organic revenue increased 5.0% on a reported basis (5.2% on a per day basis), while the net impact of acquisitions and divestitures decreased revenue by 1.2% and foreign exchange rates decreased revenue by 5.5%, for a total parts and services revenue decrease of 1.7%. Other revenue for the full year of 2022 fell 9.2% primarily due to weaker commodity prices relative to 2021.

Net income for the full year of 2022 was $1.14 billion as compared to $1.09 billion for the same period in 2021. Diluted earnings per share for the full year of 2022 was $4.11 as compared to $3.66 for the same period of 2021, an increase of 12.3%.

On an adjusted basis, net income for the full year of 2022 was $1.07 billion as compared to $1.18 billion for the same period of 2021, a decrease of 9.4%. Adjusted diluted earnings per share for the full year of 2022 was $3.85 as compared to $3.96 for the same period of 2021, a decrease of 2.8%.

Cash Flow and Balance Sheet

Cash flow from operations and free cash flow were $1.25 billion and $1.0 billion, respectively, for the full year of 2022. As of December 31, 2022, the balance sheet reflected total debt of $2.7 billion, and total leverage, as defined in our credit facility, was 1.5x EBITDA.

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 OEM recycled and aftermarket parts, replacement systems, components, equipment, and services to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

…

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