LKQ Corp. has reported record revenue for the second quarter of 2016 of $2.45 billion, an increase of 33.3 percent as compared to $1.84 billion in the second quarter of 2015. Net income for the second quarter of 2016 was $140.7 million, an increase of 17.6 percent as compared to $119.7 million for the same period of 2015.
On an adjusted basis, net income was $169.2 million, an increase of 34 percent as compared to the $126.3 million for the same period of 2015. Diluted earnings per share for the second quarter of 2016 was 46 cents, an increase of 17.9 percent as compared to the 39 cents for the same period of 2015. On an adjusted basis, diluted earnings per share were 55 cents in the second quarter of 2016 reflecting a 34.1 percent increase over 41 cents for the same period of 2015.
“Despite tough comparable periods and the carryover impact of the mild winter in North America, organic revenue growth for parts and services was a respectable 5.4 percent during the quarter, demonstrating the resiliency of our operating and diversification strategy,” said Robert Wagman, president and CEO of LKQ Corp. “We improved gross margins in our North American operations, which included 40 basis points of improvement from the aftermarket procurement initiatives implemented during 2016. Our European segment continued to show solid improvement in the second quarter, with its segment EBITDA margins increasing 40 basis points sequentially and 30 basis points year-over-year, even after absorbing the incremental cost associated with the new distribution facility in Tamworth, England. I am also pleased with the overall earnings growth achieved in the quarter, which is partly attributable to the smooth integration of the Rhiag and PGW acquisitions we completed earlier this year.”
On a six-month, year-to-date basis, revenue was $4.37 billion, an increase of 21 percent from $3.61 billion for the comparable period of 2015. Parts and services organic revenue growth for the first six months of 2016 was 5.8 percent. Net income for the first six months of 2016 was $248.5 million, as compared to $226.8 million for the first half of 2015. Diluted earnings per share were 81 cents for the first six months of 2016, reflecting a 9.5 percent increase as compared to 74 cents for the comparable period of 2015. On an adjusted basis, diluted earnings per share were 97 cents in the first six months of 2016 reflecting a 22.8 percent increase over 79 cents for the same period of 2015.
Balance Sheet and Liquidity
Cash flow from operations totaled $355.2 million on a six-month, year-to-date basis, of which approximately $102 million was invested in capital expenditures and other long-term assets. As of June 30, 2016, the balance sheet reflected cash and equivalents of $273 million and outstanding debt of $3.3 billion. Total availability under the company’s credit facility as of June 30, 2016, was approximately $1.1 billion.
In addition to the PGW acquisition, during the second quarter of 2016, LKQ acquired a distributor of aftermarket automotive products in Belgium, and LKQ’s European operations opened seven new Euro Car Parts branches.
On May 23, the company announced that S&P Dow Jones Indices added LKQ Corp. to the S&P 500 Index. The addition became effective at the close of trading on May 20.