LKQ Corporation Announces Results for First Quarter 2022

• Revenue of $3.3 billion (up 5.6% year-over-year) 

• Parts and services organic revenue increased 6.9% (5.6% on a per day basis) 

• Diluted EPS 1 of $0.94 (up 6.8%); adjusted diluted EPS 1,2 of $1.00 (up 6.4%) 

• Operating cash flow of $409 million; free cash flow 2 of $350 million 

• Stock buyback program invested $144 million for 2.7 million shares in the quarter 

• Dividend of $0.25 per share approved to be paid in the second quarter of 2022 

• Raising 2022 organic revenue and EPS outlook 

CHICAGO, April 28, 2022 (GLOBE NEWSWIRE) -- LKQ Corporation (Nasdaq:LKQ) today reported first quarter 2022 results that reflect year-over-year improvement in revenue and earnings per share.  

“We are extremely pleased with our first quarter results, which built on the momentum from last year and are a validation of the resiliency of our operating model. I am proud of our team’s commitment to operational excellence and ability to execute on our strategic priorities. Also, I am pleased with our team's responsiveness to the challenging macroeconomic environment by quickly taking action to mitigate supply chain and inflationary headwinds,” noted Dominick Zarcone, President and Chief Executive Officer. “Based on our strong start to the year and confidence in our competitive position, we are raising our full year revenue and EPS outlook.” 

First Quarter 2022 Financial Results 

Revenue for the first quarter of 2022 was $3.3 billion, an increase of 5.6% as compared to $3.2 billion in the first quarter of 2021. Parts and services organic revenue increased 6.9% (5.6% on a per day basis), while the net impact of acquisitions and divestitures increased revenue by 1.7% and foreign exchange rates decreased revenue by 2.7%, for a total parts and services revenue increase of 5.9%. Other revenue grew 2.0% driven by higher sales of other scrap metals (including aluminum) and cores and higher scrap steel prices, partially offset by lower precious metals prices. 

Net income¹ for the quarter was $269 million as compared to $266 million for the same period in 2021. Diluted earnings per share¹ for the quarter was $0.94 as compared to $0.88 for the same period of 2021, an increase of 6.8%. 

On an adjusted basis, net income^1,2 in the quarter was $287 million as compared to $286 million for the same period of 2021. Adjusted diluted earnings per share^1,2 for the quarter was $1.00 as compared to $0.94 for the same period of 2021, a 6.4% increase. 

Cash Flow and Balance Sheet 

Cash flow from operations and free cash flow² were $409 million and $350 million, respectively, for the first quarter of 2022. As of March 31, 2022, LKQ’s balance sheet reflected total debt of $2.7 billion and net debt² of $2.4 billion. Net leverage, as defined in our credit facility, was 1.3x EBITDA. 

Stock Repurchase and Dividend Programs 

During the first quarter of 2022, the Company invested $144 million repurchasing 2.7 million shares of its common stock. Between initiating the stock buyback program in late October 2018 and March 31, 2022, the Company has repurchased approximately 37 million shares for a total of $1.5 billion. 

On April 26, 2022, our Board of Directors declared a quarterly cash dividend of $0.25 per share of common stock, payable on June 2, 2022, to stockholders of record at the close of business on May 19, 2022. 

¹ References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations. 
² Non-GAAP measure. See the table accompanying this release that reconciles the actual or forecasted U.S. GAAP measure to the actual or forecasted adjusted measure, which is non-GAAP. 

Other Events 

In April, S&P Global Ratings raised the Company’s issuer credit rating to ‘BBB-’ with a stable outlook. 

On April 18, 2022, the Company completed the sale of PGW Auto Glass, a leading distributor of aftermarket glass to the North American automotive sector, for gross proceeds of $362 million, subject to customary post-closing purchase price adjustments. 

The Company revised its reporting structure to present the Wholesale – North America and Self Service operating segments, which were previously aggregated in the North America segment, as separate reportable segments. The Company filed a Form 8-K with the recast historical financial information reflecting the change on April 25, 2022. 

2022 Outlook 

Varun Laroyia, Executive Vice President and Chief Financial Officer, commented: “The business has delivered a solid start to the fiscal year, and we are encouraged by the demand outlook for our segments, as reflected in our increased full-year outlook. We continue to generate strong free cash flow and remain committed to investing in the business to drive long-term sustainable earnings growth, maintaining an investment grade debt rating, and returning excess free cash flow to shareholders via share repurchases and quarterly dividends.” 

For 2022, management updated the outlook as set forth below: 

Our outlook for the full year 2022 is based on current conditions and recent trends, and assumes current U.S. federal tax legislation remains unchanged, the prices of scrap and precious metals hold near the first quarter average and the Ukraine/Russia conflict continues without further escalation. We have applied exchange rates near March and April average levels, including $1.09 and $1.30 for the euro and pound sterling, respectively, for the balance of the year. Our outlook is also based on management’s current expectations regarding the recovery from the COVID-19 pandemic. Changes in these conditions may impact our ability to achieve the estimates. Our EPS outlook does not include the expected gain on the PGW Auto Glass sale as this amount has not been finalized. Adjusted figures exclude (to the extent applicable) the impact of restructuring and transaction related expenses; amortization expense related to acquired intangibles; excess tax benefits and deficiencies from stock-based payments; losses on debt extinguishment; impairment charges; direct impacts of the Ukraine/Russia conflict (including provisions for reserves for asset recoverability and expenditures to support our employees and their families) and gains and losses related to acquisitions or divestitures (including changes in the fair value of contingent consideration liabilities and the expected gain on the PGW Auto Glass sale).  

¹ References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations. 
² Non-GAAP measure. See the table accompanying this release that reconciles the actual or forecasted U.S. GAAP measure to the actual or forecasted adjusted measure, which is non-GAAP. 

Non-GAAP Financial Measures 

This release contains and management’s presentation on the related conference call will refer to non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included with this release are reconciliations of each non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP. 

Conference Call Details 

LKQ will host a conference call and webcast on April 28, 2022 at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) with members of senior management to discuss the Company's results. To access the investor conference call, please dial (888) 330-3494. International access to the call may be obtained by dialing (646) 960-0860. The investor conference call will require you to enter conference ID: 5232422#. 

Webcast and Presentation Details 

The audio webcast and accompanying slide presentation can be accessed at (www.lkqcorp.com) in the Investor Relations section. 

A replay of the conference call will be available by telephone at (800) 770-2030 or (647) 362-9199 for international calls. The telephone replay will require you to enter conference ID: 5232422#. An online replay of the audio webcast will be available on the Company's website. Both formats of replay will be available through May 13, 2022. Please allow approximately two hours after the live presentation before attempting to access the replay. 

LKQ Corporation - LKQ Corporation Announces Results for First Quarter 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 OEM recycled and aftermarket parts, replacement systems, components, equipment, and services to repair and accessorize automobiles, trucks, and recreational and performance vehicles. 

About LKQ Europe 

LKQ Europe, a subsidiary of LKQ Corporation, with its head office in Zug, Switzerland, is the leading distributor of automotive aftermarket parts for cars, commercial vans and industrial vehicles in Europe. It currently employs approximately 26,000 people with a network of more than 1,000 branches and approximately $6.1 billion in revenue in 2021. The organization supplies over 100,000 independent workshops in over 20 European countries. The group includes Euro Car Parts, LKQ Fource, RHIAG Group, Elit, LKQ CZ, and STAHLGRUBER Group, as well as recycling specialist, Atracco. LKQ also holds a minority interest in Mekonomen Group. 

Further information, the audio webcast of the first-quarter earnings call, and the accompanying slide presentation can be accessed at www.lkqcorp.com in the Investor Relations section.