LKQ Corporation Announces Results for Second Quarter 2023

July 27, 2023

Revenue of $3.4 billion; parts and services organic revenue increased 4.8% (5.4% on a per day basis)
Diluted EPS of $1.05; adjusted diluted EPS of $1.09
Second quarter operating cash flow of $480 million; free cash flow of $414 million
Dividend of $0.275 per share approved to be paid in the third quarter of 2023
Completed an offering of $1.4 billion of senior unsecured notes
Uni-Select Inc. acquisition on track to close on or around August 1, 2023

CHICAGO — LKQ Corporation (Nasdaq:LKQ) reported second quarter 2023 financial results. “I am pleased to report strong operational performance for the quarter despite several headwinds, which is a testament to the strength and resilience of our diversified portfolio of businesses. Our largest segments, Wholesale – North America and Europe, produced exceptional second quarter revenue growth and margins by focusing on operational excellence. These outstanding performances offset a steep year over year downturn in commodity prices impacting our Self Service segment and the decrease in demand for our Specialty segment’s offerings, headwinds that will impact these segments for the balance of 2023,” noted Dominick Zarcone, President and Chief Executive Officer. “We also had excellent cash flow during the quarter. Taken as a whole, I am very pleased with the results and extremely proud of our global teams.”

Second Quarter 2023 Financial Results

Revenue for the second quarter of 2023 was $3.4 billion, an increase of 3.2% as compared to $3.3 billion in the second quarter of 2022. For the second quarter of 2023, parts and services organic revenue increased 4.8% (5.4% on a per day basis), foreign exchange rates increased revenue by 0.6% and the net impact of acquisitions and divestitures was flat year over year, for a total parts and services revenue increase of 5.4%. Other revenue for the second quarter of 2023 fell 23.9% primarily due to weaker commodity prices relative to the same period in 2022.

Net income for the second quarter of 2023 was $281 million as compared to $420 million for the same period in 2022. Diluted earnings per share for the second quarter of 2023 was $1.05 as compared to $1.49 for the same period of 2022, a decrease of 29.5%. The Company completed the sale of PGW Auto Glass on April 18, 2022, which generated a pretax gain of $155 million ($127 million after-tax), or $0.45 per share in the second quarter of 2022.

On an adjusted basis, net income in the second quarter of 2023 was $291 million as compared to $307 million for the same period of 2022, a decrease of 5.1%. Adjusted diluted earnings per share was $1.09 for both the second quarter of 2023 and 2022.

Operating improvements had a positive year over year impact on diluted earnings per share in the second quarter to mitigate the net headwind generated by: (i) decreases in commodity prices, which had a negative effect of approximately $0.08, (ii) higher interest rates and average debt balances in the second quarter of 2023, which drove a year over year increase in net interest expense resulting in an unfavorable effect of $0.07 ($0.05 on an adjusted basis) and (iii) the lower share count in 2023, which provided a $0.04 benefit.

Cash Flow and Balance Sheet

Cash flow from operations and free cash flow were $480 million and $414 million, respectively, for the second quarter of 2023. Cash flow from operations and free cash flow were $703 million and $567 million, respectively, for the six months ended June 30, 2023. As of June 30, 2023, the balance sheet reflected total debt of $4.0 billion and total leverage, as defined in our credit facility, was 2.3x 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.

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