CHICAGO – LKQ Corp. has reported record revenue for the first quarter of 2014 of $1.63 billion, an increase of 35.9 percent as compared to $1.20 billion in the first quarter of 2013. Net income for the first quarter of 2014 was $104.7 million, an increase of 23.7 percent as compared to $84.6 million for the same period of 2013. Diluted earnings per share of 34 cents for the first quarter ended March 31, 2014, increased 21.4 percent from 28 cents for the first quarter of 2013.
The company noted that adjusted diluted earnings per share for first quarter 2014 would have been 35 cents compared to 29 cents for the first quarter of 2013 after adjusting for a net loss resulting from restructuring and acquisition related expenses, loss on debt extinguishment and the change in fair value of contingent consideration liabilities.
"I am proud of our ability to deliver top line and bottom line growth, both organically and through acquisitions, with record revenue and earnings in the first quarter of 2014. I am particularly pleased with our organic revenue growth for parts and services of 10.3 percent, including 6.4 percent in North America," said Robert Wagman, president and CEO of LKQ Corp.
On March 27, 2014, the company amended its credit facility to increase the aggregate amount available thereunder from $1.8 billion to $2.3 billion ($1.85 billion under the revolving credit facility and $450 million of term loan availability). The amendment extended the maturity date of the facility from May 3, 2018 to May 3, 2019, and increased the flexibility of certain restrictive covenants, including provisions relating to restricted payments and additional indebtedness. The amendment also reduced borrowing costs under the credit facility by between 25 and 50 basis points (depending on the company’s leverage) compared to the prior agreement.
On Jan. 3, the company completed its acquisition of Keystone Automotive Operations Inc., a leading distributor and marketer of specialty aftermarket equipment and accessories in North America. With the acquisition of Keystone Specialty, LKQ’s financial statements present an additional reportable segment titled, "Specialty."
In addition to the Keystone Specialty acquisition, during the first quarter of 2014 LKQ made four acquisitions: Knopf Automotive, a supplier of cores and new parts to the automotive aftermarket with locations in nine states; a business in South Carolina with one wholesale salvage yard and one self service retail operation; a paint distributor in the United Kingdom; and a paint distributor in Canada.
LKQ’s European operations opened 11 Euro Car Parts branches in the first quarter of 2014. As of March 31, 2014, the company operated from 156 Euro Car Parts branches and 26 paint distribution branches in the United Kingdom.
On April 15, the company announced that it had signed letters of intent to acquire five Netherlands companies, all of which are customers of and currently serve as distributors for LKQ’s Netherlands subsidiary, Sator Holding B.V. Our preliminary estimate of the aggregate annual revenue of the five companies (after netting existing sales among the companies and Sator) is approximately $180 million. LKQ is targeting the completion of the transactions in the second or third quarter of 2014. The transactions are subject to, among other conditions, negotiation by the parties of definitive agreements and authorization under the Dutch merger control procedure. There are no assurances that definitive terms will be reached, that Dutch merger control authorization will be obtained, or that all or any of these transactions will otherwise be completed.
